Ether is outperforming the broader crypto market as the latest software update to the the Ethereum network kicks off one of the last legs of the long-anticipated transition of the blockchain to a more energy-efficient process.
The second-largest cryptocurrency by market value after Bitcoin rose as much as 5.5% to $1,643. Bitcoin was little changed, as were so-called altcoins such as Cardano and Solana. Ethereum Classic, a throwback offshoot of Ether, jumped as much as 13% for a second consecutive day.
The latest upgrade to the Ethereum network, known as Bellatrix, was activated at around 7:35 a.m. in New York Time. It officially kicks off the blockchain’s transition, known as the Merge, from proof of work to proof of stake. The proof-of-work mechanism requires powerful computers, called the miners, to secure the network and earn rewards in Ether.
The new system will replace the miners to perform the same tasks with valuators, who are essentially Ether holders staking their coins. The transition is expected to reduce Ethereum’s carbon footprint by 99% and pave the way for future upgrades that make the network more scalable and efficient.
The Merge will eliminate the multi-billion Ether mining industry. Some crypto-mining companies plan to use their equipment to mine other proof-of-work tokens such as Ethereum Classic and Ravecoin. Prices of such tokens have been on the rise as more investors anticipate the Merge will happen. A group of miners are also plotting a new token EthereumPOW, which will remain on the the old version of Ethereum after the Merge.
The next step after Bellarix will be the Paris upgrade, which boots off the miners to finalize the Merge. That upgrade is set to happen next week. The Ethereum core developers have been running the Beacon Chain, a proof-of-stake parallel to the current Ethereum proof-of-work network. The transition will be carried out through the merge of these two chains.
The Merge has been on Ethereum’s roadmap since the blockchain’s inception in 2015. Despite multiple delays in the past several years, crypto investors are betting on the Merge finally happening this year based on developers’ updates and a few successful test runs earlier this year.
