- Possible timeline emerges for a major Ethereum upgrade in the second half of this year as another key stress test is cleared, bringing closer the prospect of proof-of-stake on the world’s second-most valuable blockchain.
- Ether’s price continues to show resilience and may be expected to outperform should the software upgrade of underlying Ethereum blockchain progress smoothly.
Even the most rudimentary software upgrades are fraught with risks, so imagine upgrading a multi-billion dollar decentralized piece of open source software that requires coordination with varied stakeholders and upon which billions of dollars more worth of transactions depend.
To say that the risks are high in Ethereum’s upcoming software upgrade is to put in mildly as the world’s second-most valuable blockchain by market cap looks set to make history in an ambitious move to “proof-of-stake.”
For the uninitiated, blockchains are typically secured using a “proof-of-work” mechanism that basically trades computing power and electricity for mining rewards in that blockchain’s native cryptocurrency.
Proof-of-work has long been criticized for being a wasteful use of energy, which is where proof-of-stake comes in, which allows “stakers” with existing pools of a blockchain’s cryptocurrency, to use those pools to validate transactions and secure the blockchain.
Ethereum’s shift to proof-of-stake, which would also facilitate a higher throughput of transactions and dramatically increase speed, has been dubbed the “Merge.”
Initially scheduled for rollout somewhere in the second half of this year, one of its leading software developers has now said that it will be completed several months after June, establishing a possible timeline for a shift that has been years in the making.
To be sure, upgrading decentralized software is anything but straightforward and significantly, Ethereum passed another battery of major tests on Monday, including a stress test of the upcoming upgrade.
The Merge has been a major factor in Ether’s outperformance against Bitcoin over in mid-March, when Ethereum passed another key test of its software, while Bitcoin has remained more susceptible to macro factors.
Year-to-date however, Ether has fallen around 18%, while Bitcoin has shed 14%.
Cryptocurrency miners who are continuing to mine Ether are hoping for further delays to the Merge, to continue profiting from mining, but some have already moved off to secure other blockchains.
