Ethereum could dethrone bitcoin in market value with its latest update

The long-awaited upgrade of Ethereum, the blockchain chain behind ether, could become a reality soon. The purpose of the so-called Merge (“fusion” in English) is to make this technology more scalable, secure and sustainable. This upgrade could turn ether into the largest cryptocurrency by market valueahead of bitcoin.

At the moment, the final schedule for this update is unknown. The idea is that it will be completed months ago, but it has been delayed. However, Ethereum developer Tim Beiko assured Bloomberg that “it would take a catastrophic event for it not to happen this year”. It is expected that Merge serve to attract more institutional investors to help create greater adoption and drive up the price of ether.

The main change that this update will bring is that will make your cryptocurrency miner obsolete. Currently, Ethereum relies on miners to complete complex puzzles to validate transactions and create new coins. This process is known as proof-of-work and requires an enormous amount of energy. Once it’s complete Mergethe blockchain chain will allow users validate transactions based on the amount of coins they contribute or wager. The more coins you bet, the more chances of validation. With the proof-to-stakeas this process will be called, it is estimated that the energy consumption of Ethereum will be reduced by 99%.

Also, it is estimated thatEther emission will fall by 90%, while supply is expected to decline by up to 5% a year. All this could boost its price, although it is impossible to know for sure.

In August 2021, Etherum implemented another major update. Since then, it has burned, or destroyed, nearly $6 billion worth of ether, according to data from Watch the Burn. Although this update was not related to Merge, shows that the emission of new ether has already slowed down. As published Fortunethe future ether could become a deflationary asset or in one with a diminishing supply that can be used as a store of valueas bitcoin is already considered.

As for the fees that miners previously received for cracking the complex puzzles of the model proof-to-work, they will become a kind of passive income for validators. According IntoTheBlock, It is expected that validations translate into rewards between 7% and 12%.

Currently, the market value of bitcoin is over $804 billion. For its part, the market capitalization of ether is more than 360,000 million dollars.