Ether has promised to do better. It has promised to take it to the next level, defeat crypto rivals and even surpass its godfather, bitcoin. But the clock is ticking.
The number two cryptocurrency would be weeks away from the “merger”, a transformative June upgrade of its blockchain Ethereum to make it faster, cheaper and less energy-consuming, with a view to a meaner and cleaner crypto future.
The anticipation had supported ether this year, even as inflation and monetary tightening curbed bitcoin. But that merger — which would see ether mining move from the energy-intensive proof-of-work method to proof-of-stake — has been delayed, frustrating investors.
“The timeline for seeing this launch is getting longer and longer,” said Brendan Playford, founder and CEO of decentralized financial data platform Masa Finance.
“It is certainly plausible that Ethereum’s highly anticipated upgrade to a proof-of-stake system could be delayed again as this transition is highly complicated and it is still uncertain whether it can actually deliver on its promise of cost reduction and higher transaction speeds.”
Ether fell 8 percent from $3,215 to $2,947 on April 11, the day Ethereum lead developer Tim Beiko said on Twitter that the June rollout had been delayed as tests progressed. It is down 13% this month to $2,844.
“It won’t be in June, but probably in the next few months,” Beiko wrote in his tweet. “There is no set date yet, but we are definitely in the final chapter.”
The timing of the merger – Ethereum’s EH1 chain will merge with a new chain to create ETH2 – remains unclear, although many crypto watchers expect it to happen sometime this year. Beiko did not respond to a request for comment via Twitter and LinkedIn.
MERGE & FLIPPER
Ether’s $363 billion market cap is less than half that of bitcoin, and together the two make up 60 percent of the crypto market.
Yet bitcoin remains just an investment with no real power to be used for contracts in decentralized financial applications. For this reason, many investors believe that a market reversal is inevitable – dubbed “the flippening” in crypto circles – with the merger acting as a catalyst for Ethereum to become the dominant platform.
“We are seeing funds rotate to Ethereum in preparation for the merger, even though we don’t know when it will be,” said Noelle Acheson, head of market insights at Genesis Trading. The buying interest, she said, “suggested that more funds seem to appreciate that (Ethereum) may be undervalued at this stage”.
Both bitcoin and ether are mined or produced using a proof-of-work (POW) method, in which thousands of miners, or network nodes, compete to solve complex mathematical puzzles.
This is a huge energy-consuming process that is estimated to cause more pollution than a small country every year, fueling fears of crypto in a low-carbon world.
The alternative proof-of-stake (POS) method uses much less power because, instead of having millions of computers racing to process puzzles, nodes with the most coins can validate transactions.
Ethereum has long been hampered by speed and processing cost issues. It only processes 30 transactions per second as a proof-of-work blockchain, but expects to process up to 100,000 transactions per second once it goes to POS.
That will allow it to compete with other smaller altcoins such as Solana and Cardano, which use POS in part or in full, for decentralized financial applications such as trading, investing, lending and even non-fungible tokens.
That is on the condition that Ethereum gets its upgrade.
“Ethereum maxis, people who believe in ‘the flippening’ believe it will come very soon,” said Acheson at Genesis Trading. “But it’s just a theory and it remains to be seen.”
(This story was not edited by DailyExpertNews staff and was generated automatically from a syndicated feed.)