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Ethereum price fluctuations suggests loyal cryptominers lack conviction about The Merge

Hands holding the Ethereum logo

Ethereum underwent one of the most significant events in cryptocurrencies. The cryptocurrency ditched its energy-hungry persona for an eco-friendly avatar, but the transition hasn’t been welcomed with open arms by investors.

Ethereum has been dropping steadily since “The Merge”. Not surprisingly, the drop started right after Ethereum moved from Proof of Work (PoW) to Proof of Stake (PoS). Technically, the cryptocurrency isn’t in a downtrend anymore. But, the exchange price of Ethereum cryptocurrency is still experiencing a lot of fluctuation.

The downward trend was quite steep right after The Merge. The cryptocurrency has, however, not yet stabilized, which indicates cryptocurrency traders and investors aren’t yet fully committed to the new “PoS Ethereum”.

Ethereum, just like every other cryptocurrency, is a speculative virtual currency. However, its significant correction can be attributed to the lack of benefits the major transition could have offered, but doesn’t.

The Ethereum Foundation claimed that after transitioning to PoS, the energy costs of Ethereum should decrease by around 99.95%. The reduction in energy consumption was due to the fact that the cryptocurrency no longer mandates solving complex mathematical equations to mine. This could have resulted in substantial reductions in the transaction costs. But that hasn’t happened.

Gas Fees continue to remain unchanged, and could go higher as the price of Ethereum shows noticeable changes and exchanges get busier. Secondly, every transaction involving PoS Ethereum continues to take nearly just as much time as the earlier PoW iteration.

Ethereum price keeps fluctuating suggesting cryptominers lack conviction about The Merge

Ethereum is currently trading close to $1360. This is about 15% lower than the $1600 price point right before the transition from PoW to PoS.

With the transition, Ethereum has put traditional cryptocurrency miners at a difficult crossroads. The expensive “mining rigs” that traditional crypto miners procured to mine Ethereum are essentially no longer a critically needed infrastructure for the cryptocurrency.

PoS Ethereum does not require expensive computers and graphics cards. It merely needs Ethereum crypto coin owners to stake a part of their holdings. Hence, it is not clear who will buy, support, or rally behind the speculative cryptocurrency, which is now driven primarily by money than by hardware.

Via: TechCrunch

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