The second largest cryptocurrency Ethereum has started a new “green” era – miners are finished!

Ethereum, the second-largest cryptocurrency network by market capitalisation, hit a historic milestone this week. An update to the protocol called merge, expected for several years, has just taken place. What does this mean for Ethereum and its users? What changes are coming with the merge?

The main change is that Ethereum switched to a new way of verifying transactions, Proof-of-Stake (consensus mechanism), and left the original Proof-of-Work mechanism still used by Bitcoin. Thanks to this change, the electricity consumption of the Ethereum network has decreased by more than 99%. As for the price of Ethereum, the transition to the least energy-demanding version of verification means a step towards even greater acceptance, which could also be reflected in the price growth in the long term.

“This is a huge milestone and the beginning of a new era for Ethereum. The transition to Proof-of-Stake moves Ethereum not only to an ecologically sustainable form of the network but also closer to further improvements to the protocol that will allow the network to scale better,” said Fumbi’s Chief Investment Officer, David Stancel.

This protocol change effectively put an end to miners who used powerful graphics cards to calculate math operations and therefore burned a lot of energy. From now on, miners are replaced by validators who must lock a certain amount of ether (the network’s native token) to validate transactions on the network. In this way, they also ensure the integrity and security of the network.

An ordinary user does not have to do anything about the protocol change and should not notice the change at all. This also applies to Fumbi users who have purchased Ethereum either through the Fumbi Custom product or within the Fumbi Index Portfolio, where there are more than 20 cryptocurrencies besides it. “We believe that the transition to a less energy-demanding version will have a positive effect on the development of the price of Ethereum and that our users, who currently number more than 100,000, will also benefit from this fundamental shift of the second strongest cryptocurrency,” adds Boris Haško, Chief Marketing Officer of Fumbi.

What is Ethereum?

Ethereum is a platform for smart contracts. It works as a global computer to which anyone can upload basically any application, which is then uncensorable and unstoppable. The network has its own currency, ether, which is burned with every transaction on the network.