The benefits and drawbacks of switching Ethereum to PoS
The switch to PoS for Ethereum caused a decline in the need for graphics accelerators. As soon as word of the merger broke, graphics card costs fell, relieving gamers.
The network’s lower energy consumption was thought to be the transition’s main benefit by the developers. In reaction to ongoing news reports in 2021 about the environmental degradation caused by miners, energy use was reduced. The predicted annual energy usage was decreased from a peak of 112 TWh to 0.01 TWh as a result of the algorithm change.
The network’s increased centralization, the emergence of censorship, and the SEC’s regulatory intrusion on the cryptocurrency’s status, or whether it is a security or not, are the negative effects of the merger. You must stake 32 ETH in blocks in order to start a node and earn passive income. Many cryptocurrency fans felt that sum to be excessive. The need for aggregators’ services grew as a result. As a result, Lido Finance alone holds a 30.5% market share, with cryptocurrency exchanges that abide by US regulators holding the remaining 32.1%.
Aggregators include options that allow them to disregard transactions from addresses that are on the “blacklist,” which is often the list maintained by the Office of Foreign Assets Control of the US Department of the Treasury (OFAC). Thus, 81 of the most recent 100 blocks met the regulator’s requirements, bringing the daily average for censoring to 64%.
Gary Gensler, the chairman of the SEC, made a passing allusion to the fact that Ethereum is comparable to a security on the day of the switch to the PoS algorithm. Additionally, in the current environment, more than half of all transactions occur in the United States, necessitating a tighter approach to network regulation.
Ethereum and Bitcoin: What to expect
Recent developments imply that Ethereum is gradually drifting away from Satoshi Nakamoto’s original vision for cryptocurrencies as its independence from financial institutions and regulators becomes more fleeting. Does this represent a too-high cost for energy efficiency?
Despite the fact that Bitcoin controls the market’s overall direction, it has started to lose its hegemony. However, there are also Altcoins that trade at considerably lower prices than Bitcoin, like the DOT. We can witness some Altcoins retaliating against Bitcoin in some cases. Additionally, there is Ethereum, whose market valuation correlated with that of Bitcoin and other altcoins.
The market started to turn around last week, as evidenced by certain alta jumping erratically. However, this coming week will be less encouraging but more decisive. Watching the levels indicated on the Ethereum chart at this time is crucial. The medium-term trend may start in the area of 1700 dollars. Followed by a breakdown of this resistance level and the price’s journey to the region of 2600 dollars. If the price hits this level (1400 / 1200 dollars) and we observe buyer interest (keeping the price at this level).
Understanding what will happen to the bitcoin market next is crucial for us at this point. Ethereum, in my opinion, has already touched bottom and is currently forming a mid-term trend. Despite Bitcoin’s deterioration. While we observed the stock market decline, Bitcoin stood steady at $18,000.
