With the upcoming ‘Merge’ update slated for September, Ethereum ($ETH.X) is taking up a good chunk of the cryptocurrency news space. Here’s what’s been happening with Ethereum:
The Merge Update
In case you missed it or are out of the loop, the ‘Merge’ for Ethereum is a transition from Ethereum being a Proof-of-Work (PoW) blockchain to a Proof-of-Stake (PoS) blockchain. The main purpose of the ‘Merge’ is to increase scalability, reliability, efficiency, and accessibility.
Another Ethereum Hard Fork?
Not everyone in the Ethereum community wants to see the Merge occur. A PoW hard fork of Ethereum exists but isn’t getting much traction. Tron ($TRX.X) founder Justin Sun supports the Ethereum PoW fork, but it’s not getting a ton of momentum.
Is there any interest in an Ethereum PoW hard fork pair? It’s mixed.
Only a few exchanges have committed to hosting the new ETHPoW pair, the most notable are: MEXC, DigiFinex, Gate.io, and Poloniex.
Chainlink ($LINK.X) is sticking with the PoS Merge. The CEO of crypto exchange OKX took to Twitter to confirm support of the Merge, and that ‘potential’ hard forks could be looked at.
At @OKX, we actively monitor and will support the #Ethereum Merge.
Potential Ethereum hard forks may emerge when the network's upgrade takes effect.
We will evaluate and list the newly forked coins if there is sufficient demand.
— jay_star.okx ⚛️ OKX CEO (@star_okx) August 8, 2022
Another exchange, Huobi, put out a presser detailing what criteria must be met for any hard forks to be listed. Finally, Binance said it was monitoring the Merge, and would ‘evaluate’ any hard forked tokens.
Two of the biggest stablecoin issuers, Tether ($USDT.X) and Circle ($USD.X) support the Merge.
And the big ETH man himself, Vitalik Buterin, believes any PoW hard fork is just an attempt by others to make a quick buck. 🥸
Ok, so why is Ethereum Classic pumping?
First, let’s get some context on the difference between Ethereum Classic ($ETC.X) and Ethereum. Ethereum Classic is the original Ethereum blockchain. The Ethereum you know today is a hard-fork of the original Ethereum blockchain.
Why was there a fork? Because of the DAO hack in 2016, there was a sort of civil war in the ETH community. One group wanted to reverse the hack and do a hard fork; the other group felt that blockchains are immutable.
As a result, the original Ethereum blockchain’s ticker changed to ETC, while the new hard-fork of Ethereum kept the ETH ticker.
So why is Ethereum Classic spiking? The simple answer is it’s probably just following the rest of the market. However, a relatively unknown reason for its outperformance is likely due to what happens to the miners.
Currently, Ethereum and Ethereum Classic are PoW, requiring a crazy amount of energy to mine. Proof of stake is more efficient. Quite literally, the energy needed for PoW can match the entire energy output of several countries, whereas PoS requires the same amount of energy to power a standard home in the US.
So what happens to the Ethereum miners after the Merge? Since mining won’t work on Ethereum anymore, the next best thing is probably switching to mining Ethereum Classic. Ethereum Classic will still be PoW.
We’ll keep you updated as this story develops. 🤑