In July 2021, in response to an increase in crypto market-wide selling pressures, the price of Ethereum (ETH) dropped below $1,700. This time, however, it appears that ETH is responding to macroeconomic conditions and a possible delay in its transition to a proof-of-stake (PoS) blockchain.
According to CoinMarketCap, ETH fell to $1,544, representing a loss of 11 percent over the past 24 hours and a loss of 10 percent over the past week. ETH’s price has performed the worst among the top 10 cryptocurrencies over the past week, followed by Polkadot (DOT), Solana (SOL), Dogecoin (DOGE), and Ripple (XRP).
Ropsten, the Ethereum network’s oldest testnet, went live with the merge upgrade three days ago. The ETH community lauded this achievement, noting that a mainnet launch could be possible in August or September of this year. The Merge encountered obstacles, however. But Tim Beiko, a core developer at ETH, claimed they were addressed and resolved.
The Difficulty Bomb, a mechanism to gradually increase mining difficulty, is also a component of the mechanisms for the transition to a PoS consensus. The bomb’s purpose is to persuade miners to abandon proof-of-work (PoW).
The ETH core developers agreed that the difficulty bomb should remain in place for two to four months in order to provide sufficient time for the migration to a PoS consensus. Ben Edgington, the lead product manager for Teku, an Eth2 client created by ConsenSys, argued otherwise. He said:
Therefore, we’ll delay the Ethereum difficulty bomb. We assert that it will not cause the Merge to be delayed. I very much hope not. Approximately 1 million tonnes of CO2 are emitted for each additional week of POW.
The Ethereum merge is the eagerly awaited transition from its current proof-of-work mechanism to a proof-of-stake consensus algorithm. The PoS mechanism will allow the Ethereum network to scale and process transactions more quickly. Currently, only 15 to 45 transactions per second can be processed on the ETH network.