15.6 C
New York
Sunday, October 2, 2022

Buy now

Ethereum Offshoot Token Tumbles After Blockchain Branching

The additional cryptocurrency token investors received after the Ethereum blockchain switched to a new method of transacting has fallen by as much as 60% since it began trading late Thursday.

The additional cryptocurrency token investors received after the Ethereum blockchain switched to a new method of transacting has fallen by as much as 60% since it began trading late Thursday.

EthereumPOW, as the offshoot is known, represents the legacy computing business of the blockchain that chose not to participate in the software upgrade called the Merge. Ethereum moved from a so-called proof-of-work system to a more energy-efficient proof-of-stake method for securing the network.

According to data from CoinMarketCap.com for the past 24 hours, and on exchanges such as FTX, the cryptocurrency was listed at a price of as much as $33, before Ether holders received the token. It was trading at about $10.85 in New York at 1:39 PM. Ether, the blockchain’s original currency, fell for the fifth day, falling a whopping 6% to $1,413.

“Ethereum proof-of-work is not supported by users, developers, institutions and even most miners,” said Kunal Goel, a Mumbai-based research analyst at Messari. “It will likely fade to irrelevance like all other forks without community support in history, such as Bitcoin Cash, Bitcoin Satoshi’s Vision, and Ethereum Classic.”

The first few hours after the launch of ETHW, as the token is called, will be chaotic as all stable coins and pegged assets drop to zero and users rush to redeem their tokens, Goel said.

“When the Ethereum Classic fork happened, there was much lower adoption. The ETHW fork will now also create a new version of all other assets on Ethereum,” said Goel.

Ethereum’s move to a more energy-efficient way to secure its network was met with resistance from a group of miners led by Chandler Guo, a veteran Ether miner who was also a prominent backer of Ethereum Classic, another PoW offshoot. from Ethereum.

Joseph Lubin, chief executive of ConsenSys and co-founder of Ethereum, said it’s like duplicating an important city without having the people and companies that make it special.

“It’s hard to imagine people putting valuable tokens on that network or trading or deploying new software when so much is broken on the network,” Lubin told Bloomberg in a video interview Thursday after the Merger. “Essentially, it’s the work of opportunists who are likely interested in convincing people that this cargo cult blockchain is truly functional.”

The merger is just the start of a series of upgrades that will come to Ethereum to make it more scalable and decentralized. Many challenges still await the second-largest cryptocurrency, including a potential regulatory backlash.

Ethereum Classic, which saw a sharp rally in the run-up to the Merger, fell close to 8.3%.

Source link

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Stay Connected

0FansLike
3,505FollowersFollow
0SubscribersSubscribe

Latest Articles