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What Happens to Bitcoin With the Coming Ether Merge? –

What Happens to Bitcoin With the Coming Ether Merge? –

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How will the reputation of Bitcoin, which still uses PoW consensus and dominates the cryptocurrency industry, be affected by The Merge, which is said to change cryptocurrencies forever?

$204 billion market cap Ethereum’s years-awaited upgrade began last week at 7:34 a.m. EST with Bellatrix, opening the door for the blockchain to connect to another distributed ledger called the Beacon Chain and changes to Ether’s economy.

The benefits of the combination

Merge is the latest update of the Ethereum blockchain, which aims to create a reliable decentralized environment for the inflow of funds.

In addition to solving energy problems, switching to a certificate of contribution offers additional benefits.

In a PoS system, block transactions are validated by validators who have staked some of their tokens.

The more tokens someone has linked to the blockchain, the more likely they are to be randomly selected as a network validator.

In contrast, PoW, which mines tokens by using computers to solve mathematical problems, consumes a lot of energy.

PoW has a significant disadvantage due to this energy consumption, as it will continue to be the basis of Bitcoin mining long after Ethereum stops using it.

The recent collapse of cryptocurrency lenders during the bear market isn’t the only macroeconomic danger facing the entire crypto ecosystem right now. There are other risks.

Political turmoil, high inflation and a hawkish national monetary policy are additional problems.

These macro factors are said to have been the catalyst for the current bear market.

Bitcoin’s all-time high was $69,000 in November 2021.

Since then, the global economy has been in trouble, causing the price of Bitcoin and other cryptocurrencies to drop dramatically.

With the price of Bitcoin fluctuating and now hovering around $21,000 per coin, the short-term price outlook for the most widely used cryptocurrency remains unknown.

What development or change can help Bitcoin’s recovery is still unclear.

Additionally, given that the volatility of major cryptocurrencies continues to worry mainstream investors, Bitcoin’s utility may come under even more pressure due to Ethereum’s network upgrade, which aims to establish its ecosystem as the currency of the future.

Pressure on Bitcoin increases as Ethereum merges

Digiconomist, a science and technology magazine that analyzes Bitcoin energy use, usually uses financial models that include the network’s hashrate, mining revenue, and annual energy consumption.

“Bitcoin is unlikely to become more sustainable anytime soon,” it recently stated.

After China clamped down on bitcoin mining, which significantly reduced the amount of renewable energy needed for the grid, the results gained support.

Cryptocurrency analyst and researcher Alex de Vries claims that “Bitcoin grew dirtier after China’s mining crackdown in 2021.”

Is PoS consensus possible on Bitcoin?

Although it may seem profitable to exchange Bitcoin from PoW to PoS, it is technically difficult.

It would be very challenging to get more than 51% of the votes in the network even if a group of people were going to accept this change.

Contrast that with the Bitcoin Maxis, who believe that PoS could compromise the decentralized nature of Bitcoin.

Furthermore, those who benefit greatly from Bitcoin farming are likely to oppose any such proposal.

Similar sentiments are seen on the Ethereum network.

Ethereum is also split into two chains, one of which uses PoW to validate transactions.

Therefore, it would be naive to conclude that all PoW chains can be converted to PoS.

However, since the currency would be more environmentally friendly, its acceptance may also be higher.

After the integration, only 23% of the total volume is proof of work, mostly in the form of Bitcoin.

After the ETH merger, Bitcoin is being watched by regulators

Regulators are now looking for ways to control bitcoin, and PoW seems to be the first target. One of Bitcoin’s continuing shortcomings is its image as a power eater.

Ethereum creates the foundation for PoS, unlike PoW, which cannot be used for metaverse or NFTs.

However, new protocols and governance models will likely be developed in response to competing cryptocurrencies.

Competition, regulations, and energy concerns are just a few of the variables influencing Bitcoin’s uncertain future.

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