Ether edges drop after Blockchain upgrade dubbed ‘Merge’

Ether edges drop after Blockchain upgrade dubbed ‘Merge’

Ether tokens plummeted Thursday after a historic “merger” of two blockchain networks, one of which supports the world’s second largest cryptocurrency, creating a major challenge to Bitcoin’s dominance in the digital token market.

The Ethereum blockchain, on which the Ether token is built, has completed a highly technical overlap with a newly developed system that will significantly reduce the amount of power required to verify individual transactions and create new tokens.

By removing Proof of Work for transaction validation (which requires massive amounts of electricity to power computers) with Proof of Stake (a way that validators can put any of their tokens as collateral to perform essentially the same task) The new Ethereum 2.0 blockchain becomes more efficient and environmentally sustainable at the same time.

“The merger is a major technical achievement when you consider that Ethereum is the second largest blockchain today,” said Devin Ryan, an analyst at GMB Securities, who estimates its market capitalization at around $200 billion. “It won’t directly affect network speeds, fees, or scalability, but is a necessary step to move to a series of additional upgrades planned in the coming years that will give Ethereum more capacity to store and access data and thus directly reduce network congestion and transaction fees.”

“It is simply not possible to build a home for generations past on a shaky foundation and we believe the merger puts the foundation of Ethereum on a solid path to staying in place, accelerating its position as a leading blockchain blockchain,” he added.

The merge itself, despite many years in the making thanks to the work of specialized coding developers, was completed and broadcast live on YouTube in about 12 minutes.

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Ether, which makes up about a fifth of all cryptocurrency trades, was seen 0.2% higher on the session and trading at $1,600.30 each. Meanwhile, bitcoin prices fell 0.8% to $20,064.70 each.

Coinbase Global (Currency) Shares are up 1.04% at $78.70 per share while Robinhood Markets (Hood) It fell 0.28% to $10.75 each.

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