EthereumPow (ETHW) is a reaction against the Ethereum Foundation’s decision to switch from Proof-of-Work (PoW) to Proof-of-Stake (PoS) blockchain.
A Proof-of-Work (PoW) blockchain rewards miners who solve math problems with crypto. Hence, ETHPoW (ETHW) rewards miners with ETHW. Conversely, a Proof-of-Stake (PoS) blockchain rewards validators,people who verify transactions with cryptocurrency. Thus, Ethereum (ETH) now awards validators with ETH. The more Ethereum you stake, the more ETH you get.
PoW blockchains are controversial because mining consumes enormous amounts of electricity. They make most of that electricity by burning fossil fuels and producing greenhouse gases. It also increases costs by raising electric bills. It is hard to scale to scale PoW blockchains, thus ETHPoW constructs are harder to build, and make transactions expensive.
The Great Ethereum Merge
Comparatively, PoS blockchains can be cheaper to operate and have less environmental impact. Since it is easier to stake PoS chains, you can build larger constructs which have more capacity. Thus, a PoS blockchain can be faster and serve more customers.
The so-called Ethereum (ETH) Merge was Ethereum’s conversion from PoW to PoS. The Ethereum Foundation launched the Merge to lower costs and make Ethereum more accessible to users.
During the Merge, Ethereum switched from its PoW original chain to the PoS Beacon Cahin. ETHPoW’s creators claim they built their cryptocurrency on the original PoW based Ethereum-network.
Mr. Market did not like the Ethereum Merge. Ethereum’s Coin Price fell from $1,739.38 on 13 September 2022 to $1,462.85 on 17 September 2022 to $1,348.45 on 19 September 2022. During the Merge on 15 September 2022, Ethereum fell from $1,585.90 to $1,473.47.
In contrast, ETHPoW’s Coin Price shot up to $53.27 on 15 September 2022 during the Merge. However, ETHPoW fell to $8.1374 on 17 September 2022 and $5.84 on 19 September 2022. ETHPoW was trading at $41.22 on 14 September 2022.
Therefore, Mr. Market dislikes both ETHPoW and Ethereum (ETH). It appears traders are skeptical of both Ethereum’s Merge and ETHPoW’s conservatism. Mr. Market is also skeptical of both PoS and PoW.
What Value does ETHPoW have?
There is a strong interest in ETHPoW (ETHW). For example, ETHPoW was CoinMarketCap’s most trending cryptocurrency on 17 September 2022.
However, CoinMarketCap gave ETHPoW no Market Capitalization, no Fully Diluted Market Cap, and No Circulating Supply on 17 September 2022. However, CoinMarketCap gave ETHPoW a $129.036 million 24-Hour Market Volume on 17 September 2022. ETHPoW was CoinMarketCap’s 2,664th largest cryptocurrency on 17 September 2022.
Conversely, CoinBase gave ETHPoW a $129 million 24-Hour Market Volume of 17 September 2022. CoinBase gave ETHPoW no Market Cap and no Circulating Supply. I consider ETHPoW highly unstable because CoinBase gave it a $141.36 All-time high Coin Price.
Finally, CoinGecko gave what it calls Ethereum PoW Fork IOU (ETHW) an $8.13 Coin Price, no Market Cap, no Circulating Supply, no Total Supply, and a 24-Hour Trading Volume of $101.745 million 24-Hour Trading Volume on 17 September 2022.
I think ETHPoW is an overpriced cryptocurrency because we know nothing about it beyond the Proof-of-Work claims. Ironically, the ETHPoW creators offer no proof of this claim.
Worse, the ETHPoW creators offer no documentation or descriptions of their technology. Thus, I recommend speculators avoid ETHPoW because we know nothing about it.
The Ethereum Merge
Conversely, I think the decision to convert the Ethereum Mainnet to proof-of-stake was a smart one. In particular, they claim the Merge cut Ethereum’s energy consumption by 99.95% which should reduce Ethereum’s costs.
In the Merge, they added the Beacon Chain, a new proof-of-stake consensus layer the Beacon Chain to Ethereum. Switching to Beacon Chain eliminated the need for expensive and energy-intensive mining.
They call it the Merge because they first shipped the Beacon Chain separately from the Ethereum Mainnet. For a time, the Beacon Chain and the Ethereum Mainnet ran separately.
However, on 15 September 2022, they merged the Ethereum Mainnet into the Beacon Chain. Interestingly, they claim the entire transactional history of Ethereum merged into the Beacon Change with the Merge.
What Value does Ethereum Offer?
Ultimately, they hope the Merge will enable scalability upgrades that could increase the size, speed, and capacity of Ethereum. Ethereum creator and main-developer Vitalik Buterin has claimed the Merge will enable an Ethereum blockchain that can process 100,000 transactions per second (TPS). Ethereum was processing just 13 TPS on 17 September 2022.
Ethereum’s usage has increased slightly since the Merge. Ycharts estimates Ethereum was processing 1.266 million transactions a day on 15 September 2022 and 1.1321 million transactions a day on 16 September 2022. In contrast, Ethereum was processing 1.109 million transactions on 13 September 2022.
However, I estimate Ethereum was processing around 182 transactions per second on 16 September 2022. Note this was a rough calculation made by dividing 1.321 million by 12, then that figure by 60 twice.
Ethereum Offers Enormous Value
I think Ethereum (ETH) still offers enormous value, and so does Mr. Market. Ethereum was CoinMarketCap’s second-most-trending cryptocurrency on 17 September 2022. Similarly, Ethereum was CoinMarketCap’s second-largest cryptocurrency on 19 September 2022.
CoinMarketCap gave Ethereum a $165.109 billion Market Capitalization, a $163.855 billion Fully Diluted Market Cap, a $1,348.45 Coin Price, and a 24-Hour Market Volume of $20.553 million on 19 September 2022. They based those numbers on a Circulating, Maximum, and Total Supply of 122.423 million ETH.
Conversely, CoinBase gave Ethereum a $1,334.85 Coin Price, a $165.2billion Market Cap, and a $20.5 billion 24-Hour Market Capitalization on 19 September 2022. They base those numbers on a Circulating Supply of 122.4 million ETH. Ethereum was CoinBase’s second-most popular cryptocurrency, with an all-time high Coin Price of $4,891.70.
Plus, CoinGecko ranked Ethereum as the number two cryptocurrency on 19 September 2022. CoinGecko gave Ethereum a $1,348.75 Coin Price, a $162.639 billion Market Cap, and a $19.524 billion 24-Hour Market Volume on 19 September 2022. They based those numbers on Circulating and Total Supply of 120.572 million ETH.
I think Ethereum (ETH) is still an excellent cryptocurrency speculators need to examine. Moreover, I think the Merge will add value to Ethereum by reducing costs and increasing scalability. On the other hand, I consider ETHPoW (ETHW) a lousy cryptocurrency with no apparent value. Smart speculators will investigate Ethereum and ignore ETHPoW.