In addition, they want to outperform the previous top dog Bitcoin. However, technical problems are causing delays: the originally targeted update date in June could not be kept, wrote Ethereum chief developer Tim Beiko in the short message service Twitter.Frankfurt in April. “We don’t have a fixed date yet, but we’re definitely on the home stretch,” said Beiko. He has not yet responded to a Reuters request for the current status.
From Proof of Work to Proof of Stake
“Delays in the much-anticipated move to proof-of-stake are understandable given their complexity,” said Brendan Playford, founder of crypto-focused financial services firm Masa. “Also, it’s still unclear if it can deliver the promised cost reductions and increased transaction speeds.”
So far, transactions have been validated using “Proof-of-Work”, as with the oldest and most important cyber currency Bitcoin. Users provide computing power to check transactions for authenticity and enter them in encrypted form in a common database – the blockchain. In this competition, however, only the “digger” who is the first to calculate the corresponding algorithms receives digital coins of the respective crypto currency as a reward. Everyone else gets nothing and their use of computing power was in vain. Because of this high energy requirement, which is estimated to correspond to that of a small country, cryptocurrencies have been criticized as alleged climate killers.
As part of the “Ethereum 2.0” project, the user who can prove the largest stock of digital Ethereum coins at a certain point in time will have the sole right to validate and encrypt a transaction in the “Proof-of-Stake” process. As a result, only one computer is occupied with an order instead of a hundred or a million. Some other cryptocurrencies such as Solana or Cardano already use this method exclusively or partially.
Energy saving and acceleration
In addition to saving energy, the proponents expect the changeover to result in an enormous acceleration of processes from the current 30 to up to 100,000 transactions per second. The speed increase is necessary because Ethereum is not just a digital currency, but a software platform. It can be used to program automated payment processes that are subject to certain conditions. Also, more and more digital assets are being registered as Non-Fungible Tokens (NFTs) on the Ethereum blockchain. NFTs identify a digital image, video or piece of music as original and make it interesting for collectors.
The technical improvements will greatly increase the attractiveness of Ethereum, the optimists hope. “We’re already seeing funds shifting funds into Ethereum in preparation for the ‘merge’, although it’s not yet clear when the update will come,” said Noelle Acheson, chief analyst at cryptocurrency brokerage Genesis. Apparently, they considered Ethereum to be undervalued.
Some Ethereum enthusiasts already see the so-called “Flippening” approaching. With this, they mark the point in time when Ethereum dethrones Bitcoin in terms of market capitalization. So far, the crypto prime has been valued on the stock exchange at around $733 billion, about twice as high as Ethereum. However, Genesis expert Acheson is skeptical that “flipping” will even happen. “It’s just a theory.”
Source: Nachrichten
