Ether Prices Rally As Bellatrix Upgrade Moves Ethereum One Step Closer To The Merge

Ether prices have climbed recently, pushing higher as the Ethereum community continues to brace for the network’s upcoming merge.

The world’s second-most valuable digital currency by market value surpassed $1,685.00 around 8:30 a.m. EDT, CoinDesk data shows.

At this point, the cryptocurrency had appreciated more than 7% in under 24 hours, additional CoinDesk figures reveal.

The digital asset reached this intraday high roughly one hour after the Bellatrix upgrade, which prepares Ethereum’s Beacon Chain to be merged with the platform’s mainnet, was activated.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

This development kicked off the network’s move toward using a proof-of-stake consensus mechanism instead of proof-of-work, a transition that will have several consequences.

The next step is the Paris upgrade, which is expected to take place sometime between September 10 and 20.

Upon completing this transition, Ethereum network will reduce its power consumption by more than 99%, making it vastly more energy efficient.

MORE FOR YOU
Google Issues Warning For 2 Billion Chrome Users
Forget The MacBook Pro, Apple Has Bigger Plans
Pfizer Tests Pill That Could Prevent Covid Infection

Further, the tokenomics of this network will change, as the daily issuance of tokens created through POW will be reduced.

Between this development, and the token burning created by the implementation of an upgrade called EIP-1559, the supply of ether could start decreasing, causing the digital currency to become a deflationary asset.

Past that, the merge will clear the way for further potential improvements in scalability, for example sharding, which could increase transaction capacity and also reduce fees.

Jacob Eliosoff, a cryptocurrency fund manager, described the merge as “probably the biggest change to a blockchain since Bitcoin launched in 2009” “and a huge deal for people like me who’ve been enthusiastic about the switch to PoS for a long time.”

“Of course the reduced issuance will reduce the rate of growth of the supply, maybe even lead to a shrinking supply,” he noted. “Whether this will affect the price is less clear.”

Marc Bernegger, cofounder of crypto fund of funds AltAlpha Digital, also spoke to the development.

“The Ethereum Merge is one of the most relevant events in the whole history of Ethereum,” he stated.

“Similar to the halving of Bitcoin there is a lot of coverage about the happening which is a good thing for the crypto ecosystem in general,” Bernegger noted.

“We are still in the very early stages of this new exciting world of decentralized computer protocols and the Ethereum Merge will bring the industry a big step forward,” he concluded.

Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and sol.