Ether price up ahead of upgrade

The upgrade ‘Merge’ of Ethereum, one of the major blockchains, is likely to happen next month. This upgrade has been delayed several times. However, the preparations for its launch are almost complete now. This is also increasing the price of Ether, the crypto token associated with this blockchain.

According to a Reuters report, Ether has risen for six consecutive weeks. It has risen from about $880 in mid-June to about $2,000. However, it is well below its high of $4,868.79 in November last year. Bitcoin, the largest cryptocurrency in terms of market capitalization, has had a low price recovery in comparison. According to data from CoinMarketCap, the share of Ether in the cryptocurrency market has grown to around 20 percent. Its market capitalization is around $1.14 trillion. The share of bitcoin in this market has come down from 44.9 percent about two months ago to about 40.2 percent.

In this upgrade, Ethereum developers are recoding its mining protocol from a Proof-of-Work (PoW) system to Proof-of-Stake (PoS). This is likely to greatly reduce the energy consumption of Ethereum. Some network tests will be done before it is released for use. These tests will help developers understand the performance of the network after the upgrade. More than $100 billion of decentralized finance (DeFi) apps are supported on this blockchain, and because of this, the upgrade is being cautious.

The upgrade may also bring relief to investors in the crypto derivative token called stETH. Ethereum miners have to use large server farms to order transactions on the blockchain, resulting in higher electricity consumption and increased carbon emissions. The electricity usage of one Ethereum transaction is estimated to be equivalent to 1,40,893 Visa credit card transactions. This system is called Proof of Stake. There was a shortage of electricity in some countries due to crypto activities. To tackle this problem, China banned crypto mining last year. In some other countries, crypto mining is being opposed for the same reason.

(This news has not been edited by NDTV team. It has been published directly from Syndicate feed.)

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