7 Apr 2022
Ethereum’s $415.3 Billion Capitalization Depends on ‘Merge’ that Could Make or Break Crypto
The Index Today
There’s no specific time but it is set to come within this year, Ethereum is set to make the biggest change in its near-decade history. The most important commercial highway in crypto is about to blossom or break.
Currently, the Ethereum is essentially software that uses blockchain technology to provide a digital archive of transactions. As per Bloomberg, Ethereum become the most popular basis for a growing array of commercial crypto assets and applications, including lending products, NFTs, and its native token, Ether. It runs on a network of data centers that operate as “miners,” ordering transactions that are posted to the digital ledger. In return they get paid in Ether.
The upcoming event called “The Merge” will replace miners with so-called stakers. Currently, the miners order transactions by solving complex calculations using millions of powerful servers which had an issue with the environment and energy conservation since the system has been criticized for its heavy use of electricity. Stakers, on the other hand will do it by putting up their own Ether on a new system. This upcoming change will efficiently cut energy use, but a lot could go wrong.
Ethereum’s $415.3 Billion market capitalization depends on the Merge going smoothly, but so do the thousands of businesses that operate on the blockchain, plus millions of users. According to tracker DappRadar, some $121.5 billion of capital is locked in Ethereum’s decentralized finance (DeFi) apps. While Most NFTs that also has a total value in the billions use Ethereum.
Shutting Ethereum’s old chain will send a series of changes through the cryptomining industry. But after the Merge, the energy consumption of Ethereum’s network is expected to drop more than 99%.
©Photo: REUTERS/Dado Ruvic/Illustration