The second-largest cryptocurrency, Ethereum, is Bitcoin’s most serious competitor, but one wouldn’t be able to tell from the price. Ethereum’s more significant presence, their open statement to be completely decentralized, and at over 8x the number of developers than that of Bitcoin has created an investor attitude of optimism. Crypto enthusiasts hope Ethereum will one day overtake its giant rival.
Bitcoin, falling significantly under $30,000 USD since the Fed’s decision to hike rates, has a new psychological floor in mind – as investors do not seem to be budging below $20,000. While Ethereum is moving much the same way, it has current indications to stay around the $1,500 mark, a significant price difference from competitors so closely quoted. As such, it spills over into other markets – as NFTs, for example, are commonly quoted at ETH price, choosing not to quote in the flagship currency.
What is Ethereum 2.0?
The original announcement about Ethereum 2.0 was made by ConsenSys researcher Mikhail Kalinin but has since become an extremely large project that has put pressure on Ethereum developers to deliver a finished product that will purportedly reshape the cryptocurrency markets. The plan is to increase the difficulty within the mining algorithm so that it is significantly more difficult to get a hold of the coin through traditional methods of calculation.
This would naturally increase the price of Ethereum, as less supply would cause a bidding war on the secondary markets. It also would directly align with Ethereum’s mission objectives to coordinate with current ESG principles of investing – this coming from recent media news condemning crypto-mining farms for being extremely unsustainable to the environment. This so-called “Difficulty Bomb” was scheduled for release in June of 2022 and subsequently would coincide with the “Merge” that was planned in August.
Difficulty Bomb And The Merge Explained
The original plan for Ethereum developers was to utilize their Ropsten testnet to create a powerful transfer to their proprietary point of sale network. The “Merge”, so named as it will conjoin the existing blockchain technology with the new network, causing a major upgrade that would essentially make Ethereum the fastest method of transaction, the most secure method, and also the most sustainable method on the blockchain. Various other upgrades are planned after the Merge is complete, namely in a rhyming sequence such as ‘The Verge”, and “The Purge”.
How does The Merge Tie in with the Difficulty Bomb?
Ethereum developers have been working on a piece of code that will be used much like a bomb within close-quarters space. It will automatically start increasing the difficulty of the complex algorithms that have been solved to mine the second-largest cryptocurrency in the world. It will also scale this gradually, so as to not shock the entirety of the cryptocurrency markets, steadily inflating the price, and warming up the deployment of the launch of the new PoS system. It is worth mentioning that Ethereum already had a “Difficulty Bomb” dropped earlier in the infancy stage of the project, and that was initially delayed as well.
It may not come as a surprise to investors that such a complicated sequence of events has been delayed, especially with the macro sentiments on the world stage. However, it is serving as a large obstacle in Ethereum’s race to Web 3.0, where it is hoped that they will eventually overtake the initial headstart that Bitcoin has had on the other “altcoins”.
Vitalik Buterin had anticipated delays, but never to this scale. He is assuring the public that after the proper tests have been concluded and all network validators signaled the green light, they are sure to release the Difficulty Bomb before the end of the calendar year.
Source: https://www.analyticsinsight.net/what-is-causing-vitalik-to-delay-the-ethereum-upgrade-past-june
