Ethereum will stop later in its history: “The Merge”, or “The Fusion”, which seeks to refine the software to reduce energy use, replacing traditional cryptocurrency miners with stakers.
As explained by Bloomberg, stakers will order transactions using their own Ether in a new system, which is being tested since December 2020.
The miners, for their part, order transactions by solving complex calculations on millions of powerful servers, which increases the use of electricity.
The “Beacon Chain” is the new Ethereum test system, where, after “The Fusion”, people with digital wallets of the Ether cryptocurrency will be randomly selected.
They will become validators, ordering Ethereum transactions in blocks and receiving payments with the digital currency.
Messari’s Chase Devens spoke to Bloomberg about the change and its risk.
“There has never been, in the history of blockchain networks, a change in the scale of Ethereum’s transition from proof-of-work to proof-of-stake,” Devens stated.
Concerns following the change in Ethereum
According to some experts, the price of the cryptocurrency will skyrocket, but for others, the test could go wrong.
What would they worry about? Software bugs or hacks, or miners creating an alternate Ethereum network, because they consider that by becoming stakers they decrease their profits.
“It will be like replacing the engine of an airplane while it is flying,” stated the Ethmerge portal.
Bloomberg cites that in 2020, during a cryptocurrency upgrade, a bug split it in two, destroying the DeFi ecosystem, the one that allows people to trade, borrow and lend without intermediaries such as banks.
“With all the technical updates from all these big chains there has to be caution,” says Katie Talati, director of research at Arca. “At the end of the day, we are dealing with unknown technology.”
The price of Ethereum suffered a flash crash this Wednesday, plummeting 12%. However, according to AMBCrypto, metrics are favoring a bullish outlook.
This Thursday it increased its market volume from 17,190 million to 24,250 million. “Investors are growing confident in Ethereum and expect a bullish price performance in the near future”emphasizes Manisha Mishra, editor of the portal.