ETH Heads For $1.5K Ahead of the Merge
Ethereum (ETH) jumped more than 20% over the weekend, outperforming the broader crypto market after Ethereum Foundation set a provisional new date for the long-anticipated Merge for September 19. “The Merge” is expected to see the blockchain transition from proof-of-work (PoW) to a proof-of-stake (PoS) network, fundamentally changing its consensus mechanism, and making it more environmentally friendly.
New Merge Launch Date Drives ETH Up More Than 20 %
The world’s second-largest cryptocurrency surged over 20% during the weekend, hitting a new weekly high of $1,486.09. ETH briefly returned to $1,469.43 at the time of writing. Bitcoin (BTC) also moved higher and is up more than 7% at $22,301.90.
The rally comes amid a months-long drawdown in the digital asset market that has sent numerous cryptocurrencies to new lows. The drawdown, also known as the ‘crypto winter’, marks a sharp U-turn for many crypto assets including BTC and ETH which surged to all-time highs in November 2021.
The main reason behind ETH’s latest jump is likely the newly-announced provisional launch date for the Merge – which will see the blockchain transition to the energy-efficient proof-of-stake model. One of the Ethereum Foundation members, Tim Beiko, suggested September 19 as a launch date during the latest Consensus Layer Call.
The new date marks the strongest hint yet that the Merge is just a few weeks away, even though many already expected it to launch in mid-September. Last year, Ethereum co-founder Vitalik Buterin said the upgrade to PoS will come sometime in late 2022. Before the Merge, Ethereum has to undertake a final trial on the last Ethereum testnet, Goerli, over the next several weeks.
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A New Era For Ethereum
The Merge is undoubtedly the most highly anticipated development for the number two cryptocurrency, and for a good reason. The switch to a PoS consensus mechanism will reduce the blockchain’s energy use and carbon emissions by 99%, which would address one of the blockchain’s primary critiques.
With the PoS model, Ethereum will stop relying on miners and instead allow individual users to stake the native cryptocurrency and become the so-called ‘validators’. Similar to miners, validators also serve to verify transactions and protect the network’s security.
For the Ethereum blockchain, validators have to stake 32 ETH with the network to have a chance to get randomly picked to add blocks to the chain. With PoW and PoS mechanisms, contributing blocks to the chain usually produces rewards for the block issuer.
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