The creator of Ethereum, Vitalik Buterin, said that the exodus of miners to other blockchains for the sake of mining cryptocurrencies according to “classic” rules will not prevent a large-scale network upgrade. The Merge event, with which Ethereum will switch to the Proof-of-Stake (PoS) model, will leave millions of miners out of work – some may migrate to Ethereum Classic or create a new fork.
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“I don’t think that another fork will somehow harm Ethereum. In general, in my experience, almost everyone I talked to in the Ethereum ecosystem supports the direction of PoS, it unites the ecosystem”– quotes Bloomberg Mr. Buterin’s speech at the webinar.
With the software update, the blockchain will conduct transactions not through the powerful resources of miners, but through validators. The decision to move was made a long time ago, but the developers needed a lot of time for preparation, because any mistakes in the ecosystem are costly. The Ethereum blockchain is the most important cryptocurrency platform, any failures might affect millions of users and cost billions of dollars.
The network has more than 3400 active applications from various areas: from trading to games. Decentralized finance (DeFi) services handle $40 billion worth of assets, including non-fungible tokens (NFTs). The market capitalization of the native cryptocurrency of the Ethereum network is $ 200 billion – less than half the capitalization of bitcoin.
Shortly before the Merge event, many crypto exchanges and other services are expected to suspend their operations as a precautionary measure. The developers say that if the update is successful, no one will notice anything. But Ethereum, according to various estimates, will reduce energy consumption by more than 99%.
Ethereum’s own cryptocurrency, like many other digital assets, is going through hard times – it is with a variable success trades around $1700, but lost regarding 55% in price during the year.
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