Ethereum is a decentralized platform with its native digital currency — Ether — and can be used for several other applications such as creating games or banking apps. Ethereum’s network validates and creates new blocks much faster than Bitcoin’s network, which makes transactions on Ethereum’s network faster.
However, historically, the market value of Bitcoin has always been higher than that of Ether. The total production quantity of Bitcoin is limited to 21 million, but Ether has no such limitation.
The Crypto market was trading higher even as the Federal Reserve reiterated plans to keep raising interest rates to tamp down soaring inflation.
Why Ethereum Outperformed Bitcoin?
Even before the Fed-related news, Ethereum onboarded the hype train as it transitioned from proof-of-work to proof-of-stake. After multi-year delays, The Merge is most likely to happen in the second half of September. However, because there will no longer be any Ethereum miners, as they are replaced with validators, Ethereum Classic (ETC) has been the top performer.
As the original proof-of-work network from which the current Ethereum hard-forked, Ethereum Classic is now in the speculative cauldron, seen as a neglected haven. After all, much can go wrong when coding is concerned, so there were many ETH 2.0 delays.
Tim Beiko, running core protocol meetings for Ethereum, announced a busy August. Before the real Merge happens, it must first be tested on the Goerli testnet, which simulates the active Ethereum mainnet. More importantly, for over 411k Ethereum validators, Beiko noted this is the last chance for validators to prepare before the mainnet PoS transition.
What Will The Merge Do?
Outside of cutting its energy footprint by an estimated ~99.95%, one should not expect ETH gas fees to be on the negligible level of Polygon, its scalability sidechain. For such an improvement to happen, Ethereum’s main chain would have to undergo scaling itself. This upgrade is called sharding, scheduled for late 2023 at the earliest.
The present Beacon Chain, running proof-of-stake consensus, will become Ethereum 2.0. 411,639 Beacon Chain validators have already staked 13.17 million ETH ($21.8 billion), at an average balance of 33.71 ETH. It is expected, given that the minimum staking needed is 32 ETH (only for those who propose blocks).
With miners gone, Ethereum is then on the road to processing up to 100,000 tps, a drastic upscaling from the present 15 tps. As noted, that level of performance will begin after The Surge upgrade phase, in which the new Ethereum will be sharded.
Akin to Polkadot’s or Polygon’s network architecture, sharding breaks the network into smaller pieces – shards – so the traffic load is spread out. If it all goes well, there should be zero network downtime after the Merge.
Ethereum (ETH) also consolidated on Saturday, with traders nervous as prices moved closer to a key resistance level.
The world’s second-largest cryptocurrency moved to a low of $1,661.86 earlier today. However, as the day progressed, ETH/USD rallied, trading around the $1,714 region as of writing.
Yesterday’s decline came as ETH neared a ceiling of $1,780, with price strength also encountering its own resistance.
The 14-day relative strength index (RSI) is currently tracking at 62.80 after failing to break out of its ceiling of 65 on Friday.
It was one of the catalysts to send ETH lower and should bulls reenter with significant force, and this will be their first obstacle to conquer.
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