The cryptocurrency industry will soon experience one of the biggest changes in its history. Currently, many first-generation chains have a consensus verification mechanism called proof-of-work (PoW). However, this situation maximizes energy consumption. Proof-of-stake (PoS), on the other hand, reverses this situation. With the Ethereum merge scheduled to take place tomorrow, the network will switch from PoW to PoS. So, which altcoins should be watched at this time? InvestorPlace analyst Josh Enomoto has listed the projects that can be watched.
The first altcoin to watch before the Ethereum merge: Ethereum!
Currently, the focus of attention among cryptos belongs to Ethereum (ETH). The number two crypto by market cap, Ethereum represents the cornerstone of countless blockchain projects. However, the criticism it has received over the years has been that the ETH network works on a PoW consensus mechanism. With Merge, Ethereum will transition to PoS. The general consensus points to optimism for the groundbreaking event. Even mainstream institutions like CBS News have published reports on Merge explaining the potential benefits.
However, the news outlet also provided information on the risks. In particular, Bryan Daugherty, director of global public policy at the BSV Blockchain Association, said that moving to a PoS system will lead to a class gap between validators and users.
Other altcoin to watch from Ethereum merge event: Tether
According to the analyst, it is important to watch Tether (USDT) on Merge. A stablecoin, as we report on cryptocoin.com, is a crypto asset pegged to a currency (typically the US dollar). Tether also effectively acts as a cryptocurrency. To explain, cryptos and fiat currencies operate in two separate paradigms. There are often delays between converting fiat money to cryptocurrencies. Also, several financial institutions deny participation in cryptos.
For this reason, many investors keep a significant portion of their wealth in stablecoins like Tether. If there are developments in crypto that they want to respond to, they can do so right away. Also, cryptocurrencies trade 24/7, making fiat-based conversions extremely cumbersome. However, the issue is whether Tether maintains control and the 1:1 ratio. In volatile situations, it may be wise for investors to return mostly to fiat money.
Ethereum Classic is also on the list
During the initial launch of the ETC, which was called the original Ethereum, the network suffered a massive attack. To address the impact of the cyber breach, several developers wanted to implement a hard fork. However, others disagreed, stating that arbitrarily pressing a reset button removes the whole concept of decentralization. However, the discussion (ironically) failed to reach a consensus resolution.
The hard forked chain became Ethereum, the original chain became Ethereum Classic. However, the main distinguishing factor between the two Ethereums will now be ETH’s implementation of a PoS mechanism. On the other hand, the ETC network will remain connected to PoW. Technically, some believe the ETC will benefit from the upwind bullish momentum. Basically, according to the analyst, Ethereum Classic could be one of the cryptos to watch as the PoW mechanism arguably has a more intuitive profile.
How will Cardano (ADA) be affected by the Ethereum merge?
Cardano (ADA), one of the more interesting names to watch among cryptos, represents a pioneer in PoS innovation, according to the analyst. According to the project’s website, Cardano’s PoS platform is “the first to be developed using evidence-based methods based on expert-supervised research.” However, this narrative also presents risks. ADA ranked as the number eight cryptoasset by market cap. Its market value was close to $17 billion. This pales in impressively to Ethereum’s $211 billion market cap.
Now, Cardano’s competitive factor is largely focused on the PoS mechanism. However, with the ETH network switching to a similar consensus protocol, users may see ADA as unnecessary, according to the expert. Interestingly, the White House’s recent work on crypto specifically mentioned Cardano in the context of environmental impact. As such, ADA may rise in the Merge event as it may inspire other legacy chains to consider the transition to PoS, according to the expert. On the other hand, if many of these well-known legacy chains switch to PoS, Cardano could lose its distinction.
Solana (SOL) is also on the list
Solana (SOL), often referred to as an Ethereum killer, has made a notable debut. At its lowest point in spring 2020, SOL was changing hands for around 50 cents per coin. At its peak, the same SOL units had a price tag of over $250. Many people wish time travel was possible. Still, prospective investors have some reason to buy Solana now, even though it has risen incredibly from its 2020 low.
According to How-To Geek’s description, “Solana is a high-speed network sometimes referred to as the ‘Ethereum Killer’. Because it often involves cheap fees and fast transactions compared to expensive ‘gas’ fees. Despite the enthusiasm over Solana, investors will want to take a cautious approach, according to the expert. As with other PoS-based cryptos, Ethereum’s entry into the consensus mechanism could bring significant competition.
Last altcoin in Ethereum merge list: Biggest meme coin DOGE
Dogecoin (DOGE) continues to fascinate market participants. Dogecoin is known for offering a fun-loving community, especially while Tesla CEO Musk draws significant attention with his posts. According to the analyst, DOGE could be a kind of countermeasure against Merge’s whims. Unlike other cryptos, the Dogecoin community does not have great ambitions to eradicate global hunger.
On the contrary, according to the expert, like many other meme coins, the emphasis is on profitability and friendship with like-minded traders. However, if there is one glaring risk with Dogecoin, it is that the asset is energy-intensive. According to Digiconomist, annual Dogecoin energy consumption amounts to 3.15 terawatt hours (TWh). This is equivalent to Montenegro’s power consumption.
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