[Market Update] Ethereum Is Down Despite “The Merge” Success

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The drop in Cryptocurrency had suffered almost every coin and token. Cryptocurrency is known for its price fluctuation and volatility often leads to encouraging other traders to buy while the value is lower. Like Bitcoin, Ethereum didn’t fare much better. The second biggest coin in cryptocurrency had dropped 45.35% slump to US$1329.19 (at the point of writing); the lowest since March 2021. 

The Ropsten Testnet Merge.

According to Ethereum core developer, Tim Beiko, The Ethereum network’s oldest testnet; Ropsten was able to complete “The Merge”. The testnet has begun including blocks and operations that mark on ETH’s  most important milestone of migrating from Proof-of-Work (PoW) consensus to a Proof-of-Stake (PoS) consensus algorithm. “The Merge” is the event that will complete this process and combine ETH’s execution layer (ETH 1.0) with its consensus layer (ETH 2.0).

What are PoW and PoS?

Proof-of-work is the mechanism that allows the decentralized Ethereum network to come to a consensus, or agree on things like account balances and the order of transactions. This prevents users from “double spending” their coins and ensures that the Ethereum chain is tremendously difficult to attack or manipulate.

Proof-of-stake is the underlying mechanism that activates validators upon receipt of enough stake. The user will need to stake 32 ETH in order to become a validator. Validators are chosen at random to create blocks and are responsible for checking and confirming blocks they don’t create.

Why PoS over PoW?

Proof-of-stake comes with a number of improvements to the proof-of-work system:

  • Better energy efficiency – lesser energy usage compared to proof-of-work computations. 

  • Lower Entry Barrier-  Reduced hardware requirements, which allows a better chance of creating new blocks

  • Reduced centralization risk – proof-of-stake should lead to more nodes securing the network. More secured than Proof-of-Work (PoW). 

  • Less ETH issuance is required due to low energy requirements. 

The main highlight of proof of stake is people stake coins to order the transaction, a process which is supposed to consume 99% less power.

Network Adoption still Growing yet Ethereum Network Push Difficulty Bomb

Ethereum’s Ropsten testnet was a milestone event and a significant success for the altcoin. Developers noted 99% participation and proposal rates after fixing the issues that came up during the test. 

Ethereum’s transition to an energy-efficient system could be down the road as the plan is delayed. Developers decided to delay the difficulty bomb on Friday after they discussed ironing out various bugs they discovered when they ran the software for the Merge on Ropsten. The delay is called the “difficulty bomb” designed to slowly boot miners off the blockchain. Ethereum network is set to push back the difficulty bomb by 2.5 months, and the Sepolia and Goerli merge events on the testnet are approaching. 

Ethereum price continued to decline with the delay in difficulty bomb, ETH witnessed a double-digit drop.

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