Crypto

What the Ethereum ‘Merge’ means for the future of cryptocurrency

Published

2 years ago

September 19, 2022

What the Ethereum ‘Merge’ means for the future of cryptocurrency

The world’s second-largest cryptocurrency, Ethereum, final week reworked the elemental structure governing the way it secures its blockchain — an unprecedented demonstration of established crypto platforms’ capacity to evolve to altering situations.

The occasion, referred to as “the Merge,” was 5 years within the making. A number of hours after midnight on Thursday, Ethereum shifted its blockchain from a configuration referred to as “proof of labor” — additionally utilized by Bitcoin — to 1 referred to as “proof of stake.” Matt Nelson, a product supervisor on the Ethereum analysis and improvement agency ConsenSys, in contrast it to altering the engine in a automobile whereas driving it down the highway.

The transfer to the brand new model of blockchain will cut back Ethereum’s power use by 99.95 p.c, in response to the Ethereum Basis. That’s important in an trade that’s so energy-intensive the White Home warned this month that the expansion of crypto may make it tougher for the U.S. to fulfill its local weather objectives. And Ethereum’s excellent news comes at a troublesome time for crypto typically, with the costs of main cryptocurrencies dropping, the a significant crypto lender collapsing and requires regulation rising.

“We wished to be an inspiration, because the most-used good contract platform locally, to sign to actors, regulators and customers that we have been prepared to vary,” mentioned Nelson, who helped coordinate the swap. “We’re prepared to work collectively as a group to create a particularly technically advanced improve.”

Ethereum’s transformation reveals that the decentralized crypto universe can adapt because it grows. The blockchain idea that underlies crypto platforms like Ethereum is constructed on the concept an entry can’t be altered as soon as it’s made — which proponents argue makes it clear and truthful. However the Merge demonstrates that such structure can nonetheless endure main adjustments efficiently, even with thousands and thousands of customers’ knowledge in play (and a $180 million market cap). Name it a crypto coming of age.

Proof of labor versus proof of stake

That doesn’t imply the Merge is with out its critics. One persistent criticism is that Ethereum’s new structure consolidates management of the foreign money amongst a comparatively small variety of main gamers.

Earlier than the swap, customers may mine Ethereum by utilizing math. Beneath the outdated proof-of-work blockchain system, computer systems would race to unravel advanced math issues and log their work — verifying batches of transactions — to the blockchain. The primary machine to reply a selected drawback is rewarded with Ether (ETH). This course of is called “mining,” and it requires loads of electrical energy.

Ethereum’s new blockchain structure, proof of stake, replaces that computational work with pure financial pursuits. A “staker,” or one who places up ETH to stake to the community, locks their cash up for a set time frame and receives a vote for doing so.

Staking a full node requires 32 ETH, or round $45,000. Individuals can pool their cash to fund a node, even staking a proportion of a single ETH. These swimming pools, referred to as liquidity swimming pools, are provided by a wide selection of platforms and firms, reminiscent of the most important cryptocurrency trade within the U.S., Coinbase.

In truth, Coinbase, Binance and Kraken, a number of the largest cryptocurrency exchanges on the planet, personal 30 p.c of the community’s stake. And Lido, a group staking collective of 183,975 stakers, controls over 30 p.c. Critics of proof of stake are involved that this places voting management in a handful of main gamers, opposite to the decentralized ethos of cryptocurrencies. For many individuals, their authentic enchantment was that no central entity that might management them.

“I see many cheering on [proof of stake] as a method to cut back emissions, that it makes ETH greener,” mentioned Colin Harper, head of analysis and content material at cryptocurrency mining software program and providers firm Luxor. “These takes by no means acknowledge why [proof of work] exists within the first place, and that’s to make sure the censorship resistance and permissionless nature that makes a blockchain price working or utilizing in any respect. [Proof of stake] proponents flip a blind eye to this and say you could have these ensures with out the power price, however I don’t assume that’s true. There’s no free lunch.”

Broader implications

Others say the environmental advantages of the Merge can’t be overstated. The shift slashed the power use related to mining Ethereum.

“You might have this pervasive mentality in many alternative areas that blockchain is an trade that’s destructive from a local weather and environmental standpoint,” mentioned Nick Hotz, vp of analysis at Arca, a digital assent administration agency.

Some estimates put the annual power consumed by mining one other main cryptocurrency, Bitcoin, on par with the demand from the complete nation of Argentina. Different supporters of the Merge say it issues as a result of it reveals flexibility inside the rising sector. Mark Lurie, the CEO of Shipyard Software program, which builds apps and instruments for decentralized finance, mentioned that any variety in know-how will make cryptocurrencies extra versatile.

“Totally different know-how trade-offs are finest for various use circumstances,” mentioned Lurie. “I believe [proof of work] might be higher for digital gold, like Bitcoin, however [proof of stake] might be higher for distributed computing platforms like Ethereum. There are an enormous number of use circumstances, and plenty of will demand completely different technical trade-offs in scalability, pace, safety and plenty of different dimensions.”

James Key, CEO and founding father of the Autonomy Community, a decentralized automation protocol, additionally sees it as a constructive for the trade writ giant.

“It’s a really bullish signal that the area can proceed to evolve and adapt, even with the dimensions of a sequence like Ethereum — individuals have been apprehensive about this side of crypto since Bitcoin has up to now not been ready to take action,” mentioned Key.

That is solely the primary of what is going to be different substantive upgrades to Ethereum. However Nelson mentioned that, if another consensus mechanism that’s higher than proof of stake comes alongside sooner or later, he may see the group deciding to vary once more. And now, they realize it’s attainable.

“The one fixed in life is change itself, so so long as the group is able to coming collectively and adapting, the know-how platform, it might probably, in principle, persist endlessly,” mentioned Lurie.

Because of Lillian Barkley for copy enhancing this text.

Related Topics:climate change cryptocurrency science-tech-team

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Crypto

[Analysis] “Cryptocurrency Holders Surge Over the Past Two Years”

Published

5 hours ago

December 22, 2024

Press Room

[Analysis] “Cryptocurrency Holders Surge Over the Past Two Years”

Image=Santiment

It has been observed that the number of cryptocurrency holders has surged over the past two years.

On the 23rd (local time), the on-chain analysis platform Santiment reported on X (formerly Twitter) that “the number of cryptocurrency holders has significantly increased over the past two years. The number of non-empty wallets for the top 4 cryptocurrencies by market capitalization has generally increased.”

Specifically, Bitcoin (BTC) has 54.7 million wallets (a 27% increase), Ethereum (ETH) 134.9 million wallets (a 47% increase), Tether (USDT) 657 million wallets (a 66% increase), and Ripple 575 million wallets (a 28% increase).

Crypto

Blockchain Revolution: How Cryptocurrency is Transforming Global Logistics – theafricalogistics.com

Published

13 hours ago

December 22, 2024

Press Room

Blockchain Revolution: How Cryptocurrency is Transforming Global Logistics – theafricalogistics.com

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The global logistics industry is undergoing a seismic shift, driven by the integration of blockchain technology and cryptocurrency.

These innovations promise to enhance transparency, efficiency, and security across the supply chain. From tracking shipments to streamlining cross-border payments, the synergy between blockchain and cryptocurrency is setting new benchmarks for the logistics sector.

1. Blockchain’s Role in Logistics

Blockchain technology, essentially a decentralized ledger system, enables secure and transparent recording of transactions. For logistics, this translates into the ability to track goods in real-time, authenticate the origin of products, and mitigate fraud. Key benefits include:

Enhanced Traceability: Every transaction, from the manufacturing stage to delivery, is recorded on an immutable ledger. This ensures that stakeholders have a comprehensive view of the supply chain.
Reduced Paperwork: By digitizing documents such as bills of lading and certificates of origin, blockchain eliminates the inefficiencies of manual processes.
Improved Trust: Smart contracts, self-executing agreements coded on the blockchain, reduce disputes and enhance trust between parties.

2. Cryptocurrency in Cross-Border Transactions

Traditional cross-border payments in logistics are often marred by high fees, long processing times, and currency exchange risks. Cryptocurrencies, like Bitcoin and stablecoins, are addressing these challenges by:

Lowering Transaction Costs: Cryptocurrency transactions bypass intermediaries, significantly reducing fees.
Speeding Up Payments: Transactions settle in minutes, eliminating delays common with traditional banking systems.
Enhancing Financial Inclusion: For businesses in emerging markets, cryptocurrencies provide access to global trade without reliance on conventional banking infrastructure.

3. Use Cases Transforming the Sector

Several real-world applications highlight the impact of blockchain and cryptocurrency in logistics:

Walmart’s Blockchain Initiative: Walmart leverages blockchain to track the origin of produce, ensuring food safety and traceability within its supply chain.
Maersk’s TradeLens Platform: Developed in collaboration with IBM, TradeLens uses blockchain to digitize and streamline global shipping documentation, reducing inefficiencies.
Cryptocurrency-Powered Freight Payments: Startups like Slync.io enable shippers to pay carriers using digital currencies, enhancing payment speed and reliability.

4. Challenges to Adoption

Despite its potential, the adoption of blockchain and cryptocurrency in logistics is not without hurdles:

Regulatory Ambiguities: The legal status of cryptocurrencies varies across countries, complicating implementation.
Scalability Concerns: Processing thousands of transactions per second remains a challenge for blockchain networks.
Skill Gaps: The logistics workforce often lacks the technical expertise to deploy and manage blockchain systems.

5. The Road Ahead

The integration of blockchain and cryptocurrency in logistics is still in its nascent stages but holds immense promise.

Industry players are investing in pilot projects to explore scalability and operational viability. The convergence of these technologies with artificial intelligence and IoT will further revolutionize the sector, enabling predictive analytics, autonomous supply chains, and more.

Conclusion

Blockchain and cryptocurrency are not just buzzwords but transformative tools reshaping the logistics landscape.

By fostering transparency, reducing costs, and expediting processes, these technologies are addressing long-standing inefficiencies in the supply chain.

As adoption accelerates, businesses that embrace this revolution stand to gain a significant competitive edge in an increasingly digital and globalized economy.

Also Read

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Exploring the potential use cases of Pi Coins post-launch

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Crypto

My Top Cryptocurrency to Buy Right Now (Hint: It's Not Bitcoin) | The Motley Fool

Published

21 hours ago

December 22, 2024

Press Room

My Top Cryptocurrency to Buy Right Now (Hint: It's Not Bitcoin) | The Motley Fool

The performance of Bitcoin (BTC -0.53%) this year has been nothing short of extraordinary. It’s now up about 46% since the election on Nov. 5, and 146% year to date. Best of all, Bitcoin recently broke through the $100,000 price level to hit another all-time high just north of $108,000.

But what if I told you that there is another top cryptocurrency that is up more than 120% since the election, and 430% year to date? And that this cryptocurrency also just set a new all-time high? That cryptocurrency is Sui (SUI -3.69%), which now ranks 14th among all cryptocurrencies with a $13 billion market cap.

What is Sui and why haven’t I heard of it before?

If you’ve never heard of Sui, that’s understandable. The cryptocurrency only launched in May 2023, just as the market was emerging from the crypto winter of 2022. So, in many ways, its launch flew under the radar of investors. There were bigger issues to consider. The industry was still coping with the aftermath of the collapse and scandal of crypto exchange FTX in November 2022, and nobody was very interested in hearing about another new cryptocurrency launch.

But fast-forward to August 2024. That’s when 21Shares — the company that partnered with Cathie Wood’s Ark Invest on the launch of spot exchange-traded funds (ETFs) for Bitcoin and Ethereum (ETH -0.79%) — released a research report on Sui, detailing all of its unique characteristics. For example, it described how a new technical upgrade suddenly made Sui faster than any other top blockchain by a substantial margin. It pointed out how Sui was rapidly growing in terms of total value locked (TVL), which is a key metric showing the relative strength of a particular blockchain.

Image source: Getty Images.

The title of the report (“Is Sui a Solana (SOL -0.00%) Killer?”) was very provocative, at least for crypto investors. It suggested that Sui had the technological chops to take on Solana, which now ranks as the fifth-largest cryptocurrency. For several years now, Solana has been positioned as the next Ethereum, so Sui being tabbed as a potential Solana killer is a big deal. In fact, 21Shares suggested that there might be a $68 billion market opportunity for Sui if it was able to take on Solana and win.

How high can Sui go in 2025?

My primary concern right now with Sui is that it may be overheating. Just like Bitcoin, it is smashing through all-time high after all-time high. Right now, Sui is trading at about $4.50 after briefly testing the $5 price level. From the perspective of crypto traders, $5 presents the same psychological price barrier for Sui that $100,000 did for Bitcoin. It took Bitcoin a while to break through the $100,000 level, so Sui may not be able to break through the $5 price level by the end of this year.

But, in 2025, watch out. Just take a look at this comparison chart of Bitcoin and Sui since the presidential election. That leads me to think that the market is very bullish on Sui’s prospects under the Trump administration.

Bitcoin / U.S. dollar chart by TradingView

Moreover, consider the trading volume that Sui is now seeing on Coinbase Global (COIN 1.75%). Sui has become one of the 10 most popular cryptocurrencies on the platform in terms of 24-hour trading activity. Granted, the trading volume in Sui is nowhere near that of Bitcoin or Ethereum. But there’s more activity in Sui than in popular cryptocurrencies such as Chainlink, Litecoin, Cardano, Shiba Inu, and Avalanche.

Best of all, Sui has a major new product launch coming in 2025. It’s a $599 handheld gaming device that is currently available for pre-order online. If that product launch is a success, then it could be off to the races for Sui. It could easily double in price to hit the $10 price level.

This cryptocurrency could soar even higher if it ever realizes its full potential as the next Ethereum. Imagine if you had invested in Ethereum just 18 months after its launch. Most likely, you’d be a crypto millionaire by now. In December 2016, Ethereum was trading around $5, which is roughly where Sui is trading right now. Today, Ethereum trades for about $3,400.

That said, I can’t emphasize enough how speculative Sui is. It is still a baby in crypto terms. It has only been around for 18 months, and it can be difficult to get good data and reliable information about it. So, do your due diligence before investing in Sui, and keep your expectations in check. An investment opportunity like Ethereum might only come around once in a lifetime, so it’s asking a lot for it to happen with Sui as well.

Dominic Basulto has positions in Bitcoin, Ethereum, SUI, and Solana. The Motley Fool has positions in and recommends Bitcoin, Coinbase Global, Ethereum, SUI, and Solana. The Motley Fool has a disclosure policy.