As the Ethereum network approaches a definitive version 2.0 that is set to shake up the cryptocurrency ecosystem, miners are steering away from the ship of the second cryptocurrency in the market in search of new projects.
This follows from the latest data offered by the analysis house DelphiDigitalwhich pointed out in a report published this week that ether hash rate suffered a drop of about 10 percent since May, mainly due to the impact that the crypto market crash had on mining profitability.
“Over the last three months, the price of ether has trended down from $3,500 to as low as $900. The price drop means miners are now earning less in value dollars,” explained Delphi Digital.
“This situation is further aggravated by rising energy prices due to the war, with the energy price index rising to a five-year high,” they added.
Ether miners, therefore, saw how difficult it was to add transactions to the cryptocurrency block chain – increasing its hash rate -, while its value was reduced and the cost of its operations increased. , because of the macroeconomic context.
And all this, just a few months before the Ethereum network replaces the work of miners with that of validators that will be enabled to confirm transactions just by meeting the requirement of having 32 ethers.
The ether finalizes its step towards a new network
The hash rate of a cryptocurrency measures the computational processing power used by miners to secure the network.
In other words, the higher the hash rate, the more power a particular miner and the collective network are using to verify and add transactions to the blockchain of that cryptocurrency and, therefore, the more secure this network is.
The ether hash rate reached all-time highs last May, but since then it has accumulated cuts due to different reasons, such as a drop in its price that made the work of miners less attractive, or the aforementioned cost of energy.
From Delphi Digital, however, they do not hesitate to point out that the transition to the Ethereum 2.0 network also contributed to this reduction in mining operations, since the transition to this new transaction verification model will make miners stop get rewards.
What is bad news for ether miners, however, can be good news for investors, since the move to this new form of validation of its network is bound to accelerate the speed of all its operations, attracting every time more project developers DeFi and NFTs.
A transition towards sustainability that expands the weight of ether
The greater speed of the operations carried out with the ether cryptocurrency and its consequent increase in the accumulation of projects within the ecosystem, once the transition to this new 2.0 network is confirmed, will not be the only reason that can catapult the price of the cryptocurrency.
As explained by the finance.com portal, Social Investor, bitcoin mining consumed as much energy as Sweden last year, causing climate activism to focus its attention on an activity that ether can completely eradicate with its passage to the network 2.0.
So much so, in fact, that the Economic Committee of the European Parliament that works on the approval of a regulatory framework for the cryptoactive market (Mica) intended to impose that, within the future scenario imagined for cryptocurrencies, those that used the proof of work or other methodologies of high energy consumption, will be prohibited.
The European committee ended up rejecting the amendment that proposed this ban, but it did reiterate that the regulatory framework that is approved will have a formal commitment so that the cryptoactive ecosystem pivots towards a more sustainable model, such as the one proposed by ether.
The second cryptocurrency on the market, therefore, is accelerating its transition to a 2.0 model that should cement its position within the system, causing miners to jump ship.
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