What happens to Bitcoin with the upcoming Ether merger?

How will Bitcoin’s reputation, which still uses the PoW consensus and dominates the cryptocurrency industry, be affected by The Merge, which is said to transform cryptocurrencies forever?

Ethereum’s update with a market cap of $ 204 billion, expected for years, started last week at 7:34 am EST with Bellatrix, opening the door to the blockchain to connect with another decentralized ledger called the Beacon Chain and modifications to the economy of Ether.

Advantages of The Merge

The Merge is the latest update to the Ethereum blockchain, which aims to create a reliable decentralized environment for the arrival of finance.

In addition to solving energy difficulties, the move to proof of stake offers additional benefits.

In a PoS system, validators who have staking part of their tokens verify transactions in bulk.

The more tokens someone has linked to the blockchain, the more likely they are to be randomly chosen as network validators.

Conversely, PoW, which mines tokens using computers to solve mathematical problems, consumes a lot of energy.

PoW has a significant drawback due to this energy consumption rate because it will still be the basis for Bitcoin mining long after Ethereum stops using it.

The recent collapse of cryptocurrency lenders during a bear market is not the only macroeconomic danger that the entire crypto ecosystem is currently facing. There are other risks as well.

Additional problems are political turmoil, high inflation rates and aggressive national monetary policies.

These macro factors are said to have been the catalyst for the current bear market.

Bitcoin’s all-time high price was $ 69,000 in November 2021.

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Since then, the global economy has been in trouble, which has caused the price of Bitcoin and other cryptocurrencies to drop dramatically.

As Bitcoin’s price varies and is now hovering around $ 21,000 per coin, the near-term price outlook for the most widely used cryptocurrency is still unknown.

It is still unclear what development or change could help Bitcoin rebound.

Additionally, as the volatility of popular cryptocurrencies continues to worry mainstream investors, Bitcoin’s utility could come under even greater pressure from the Ethereum network upgrade, which aims to establish its ecosystem as the currency of the future.

The pressure on Bitcoin will increase as Ethereum merges

Digiconomist, a science and technology journal that analyzes Bitcoin’s energy use, usually uses economic models that incorporate network hashrate, mining income, and annual energy consumption.

“Bitcoin is unlikely to become more sustainable anytime soon,” he recently concluded.

After China restricted bitcoin mining, which significantly reduced the number of renewable energy sources needed to power the grid, the results received support.

Alex de Vries, a cryptocurrency analyst and researcher, says “Bitcoin got dirtier after China’s mining crackdown in 2021”.

Is a PoS consent for Bitcoin possible?

While it may sound profitable, Bitcoin’s transition from PoW to PoS is technically difficult.

It would be very difficult to get more than 51% of the votes on a network, even if a group of individuals intended to adopt that change.

Compare that to Bitcoin Maxis, who believe PoS can jeopardize the decentralized nature of Bitcoin.

Furthermore, those who profit greatly from Bitcoin farming will likely be opposed to any suggestions of this nature.

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Similar sentiments are seen on the Ethereum network.

Ethereum will also split into two chains, one of which will use PoW to validate transactions.

Therefore, drawing the conclusion that all PoW chains can be converted to PoS would be naive.

However, as the currency would be more environmentally friendly, there may also be greater acceptance of it.

After integration, only 23% of the entire volume will be work-proof, mostly in the form of Bitcoin.

After ETH Merge, regulators will be looking at Bitcoin

Regulators are now looking for ways to control bitcoin, with PoW appearing to be the prime target. One of Bitcoin’s continuing flaws is its image as a power consumer.

Ethereum is setting the stage for PoS, in contrast to PoW, which cannot be used for the metaverse or NFT.

However, new governance protocols and models are likely to be developed in response to competing cryptocurrencies.

Competition, regulations and energy problems are just some of the variables at play with Bitcoin’s uncertain future.

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