Ethereum Foundation developers have already settled the date for the much-awaited transition from a Proof-of-Work (PoW) consensus algorithm to Proof-of-Stake (PoS). This is something that required many years of planning and development. Now, the Ethereum network is expected to become faster, more reliable, and more useful for users.
Ethereum Ready to Move on as a Proof-of-Stake Blockchain Network
Ethereum is ready to transition to a Proof-of-Stake consensus algorithm after being one of the most congested networks in the world. The transition is scheduled for September 19, as explained by Tim Beiko, an Ethereum core developer. It is worth pointing out that other developers agreed with this date estimation for the transition.
Nonetheless, the community confirmed that this is just an estimated time for the final transition. For example, Superphiz.eth said on Twitter that this merge timeline is not final. He mentioned that they are excited about it but considered this date as “a planning timeline” rather than as an official announcement.
It is worth pointing out that the merge will let Ethereum move from the current PoW consensus algorithm to a PoS blockchain network by merging with Beacon Chain.
There are many reasons why Ethereum is transitioning to a PoS blockchain network. One of them is related to the expansion of the crypto ecosystem and the need that ETH has in order to offer reliable solutions to users from all over the world. Nowadays, using Ethereum has become very difficult and costly.
Transactions can take a long time to be processed and fees are almost very difficult to pay for some users, which makes Ethereum a network that is not user-friendly. This happened because users are now enjoying a wide range of new solutions such as decentralized finance (DeFi) protocols or non-fungible tokens (NFTs).
With the transition to a Proof-of-Stake network, things will run smoother. That means that there should not be congestion and those transaction fees should also be lower than the ones that people are paying right now. That could help Ethereum increase the solutions offered to users and compete with other more efficient blockchain networks that have been released to the market in recent years.
According to data shared by CoinMarketCap, Ethereum is now being traded at $1,200 and it has a market capitalization of $145 billion. This comes as Bitcoin gets traded for close to $20,575 and has a market valuation of $392 billion. Ethereum could increase its market valuation in the future if new projects release solutions on top of Ethereum that before were released on top of other blockchain networks.
Despite the recent announcement, it might be possible to see one more leg down for the cryptocurrency market, including Bitcoin and Ethereum. If that happens, we could see ETH falling below $1,000 once again and Bitcoin reaching $18,000 or even lower. Nonetheless, this is something that remains to be seen as the market seems to be in an accumulation period right now.