Latest Updates for the Ethereum Network
In September 2022, the Ethereum network underwent its long-awaited update called The Merge. This update was held out for ETH for several years and signified the finalization of the network moving from proof-of-work (PoW) to proof-of-stake (PoS) consensus. The update is supposed to cut down the ETH network's energy consumption by 99.95% (from 112 TWh/yr to only 0.01). It's the first step towards the chief goal of increasing ETH throughput.
What Do We Generally Know About Ethereum?
Ethereum is a cryptocurrency launched in 2014 by Vitalik Buterin. Ethereum's $190 billion market cap is second to Bitcoin's. Its supply of coins is unlimited, and its circulating supply is over 122 million.
Ethereum has a price of about $1,500 per token. ETH developers claim that they were able to reach the yearly inflation rate of 0.51% after the network's EIP-1559 update in 2021. You can convert BNB to ETH or any other coin to start reaping the benefits of low inflation.
The Ethereum ecosystem is powered by a PoS consensus mechanism that allows for transaction validation through staking. The network also uses smart contracts. Multiple decentralized financial (DeFi) projects like Uniswap use Ethereum as their kick-starter platform. Ethereum has $31.2 billion of total value locked in DeFi.
Meet The Merge
The Merge is the process of Ethereum moving from PoW to PoS. This process is significant for the entire market because many altcoins and stablecoins exist as ERC20 tokens on the ETH blockchain, including USDT and Shiba Inu.
There are serious concerns that Ethereum's transition to PoS will lead to centralization and censorship. According to MEV Watch, 65% of ETH validators are now complying with the US sanctions. The fear that Ethereum could lose its decentralization and censorship resistance is only being made worse by Google launching a cloud node engine for Ethereum developers.
ETH developers also plan to implement the sharding technology by 2023. It will significantly increase the security and scalability of the Ethereum network helping it reach the desired 100,000 TPS.
Mining vs Staking
Now that ETH switched from PoW to PoS making it more eco-friendly and scalable, most users are divided into the pro-Merge and against-Merge groups. Mining is more beneficial, but it's also more energy-consuming than staking. Let's look at the pros and cons of each reward mechanism.
Mining
Pros:
• more secure
• higher rewards
• better decentralization
Cons:
• lower throughput
• requires lots of energy
• takes more time to approve each transaction
• requires high computational power
Staking
Pros:
• faster transaction times
• more eco-friendly
• energy efficient
• more scalable
• can be done with a smartphone
Cons:
• prone to centralization
• more vulnerable to cyberattacks
• fewer rewards
Staking is a more efficient way to fight global warming. However, if you are not a fan of staking, you can still use BTC for mining.
Trading the Merge
The ETH price began to fall from $1,900 to $900 after Ropsten's test-drive merge of Ethereum in June 2022. Raising interest rates and scrutiny by the Federal Reserve didn't add to the likelihood of ETH's comeback.
Fidelity started letting its clients invest in ETH in October 2022. It's one of the largest asset managers in the world. It means that large corporations are confident that Ethereum won't get crashed by regulations or experience the severe post-Merge bug.
ETH's supply has been growing at over 0.1% per year. It's nothing compared to ETH's 3.7% rate before The Merge. While Ethereum hasn't gone deflationary, it's pretty close to hitting it. As basic economics dictates, if the supply of an asset stays the same or goes down and the demand for the asset goes up, then the asset's price will increase. This is why Ethereum's EIP 1559 upgrade has set ETH's price for a long-term increase.
ETH Future Price
Before you rush the decision and convert ETH to MATIC, see what experts have to say about the future of ETH. According to the ETH price analysis done by Walletinvestor, Ethereum will be traded for $3,874.5 in 2024. Digitalcoinprice predicts that ETH's price will reach $2,769.9 by 2023. Priceprediction believes that ETH will be worth $1,785.8 by the end of 2022.