What’s going on with Ethereum?

It is up over 100% over the last two months and this is all in anticipation of the merge when Ethereum transitions from proof of work to proof of stake

You may have seen in the news that Ethereum successfully launched on the Gourli test net, well what does this even mean? and what does this mean even more importantly for the future price of Ethereum over the next few weeks?

Well let me break it down, so Ethereum is moving as we said from proof of work to proof of stake, instead of using electricity and computers to mine they will use locked-up Ethereum, which is much more energy efficient. However, they can’t just transition right away, it doesn’t happen overnight, actually, this is multiple years in the making because there’s a lot at risk here. They are changing their entire ecosystem, and if done wrong, there is much to lose.

When blockchain makes an update or a hard fork, they first go through a test net to make sure that everything is working before actually going to the real deal. Usually, there’s one test net, if everything looks fine then they merge onto the main net. However, Ethereum, they are going through the riskiest hard fork to date.

Ethereum has so much value sitting on it, it is number two in the market cap. If things go wrong it will be catastrophic, so instead, Ethereum is going through three test nets before they hard fork on the main net.

In June, we had the Robson test net in July, we had the Sepolia test net and here we are now in august, Ethereum successfully launched the Gourley test net and this is exciting.

There is a lot of hype and because of this the price of Ethereum is exploding, and if everything goes smoothly, we have an estimated date for the real thing on the main net scheduled for September15/16, but of course, if things go wrong or delayed then maybe we’ll see a launch much later.

The whole point of these test nets is to look for a problem but right now as I write this article, there is a lot of excitement, there is a lot of hype and if we look at the chart we can see a lot of this excitement really started around June times at the Robson test net and then from there the Sepolia test net and here we are at the Gourley test net.

Ethereum has been on fire, so there’s a lot of excitement right now for Ethereum to the point where everyone’s saying Ethereum is going to flip bitcoin, I don’t think that’s going to happen or at least anytime soon that Ethereum flip bitcoin, it can happen within the next year and add to this excitement is a potential hard fork airdrop.

What does this mean?

There are Ethereum miners that don’t want to move to proof of stake, some of them are going to continue mining on proof of work, and if this happens Ethereum users will double their assets, meaning let’s say they have 20 Ethereum they’ll now have 40 Ethereum, 20 on the proof of work chain and 20 on the proof of stake chain, so basically an air job but here is where it gets tricky, we have an issue we know in the crypto space, the typical buy the rumor, sell the news leading up to an event, the price usually increases and then when that the event actually happens, whether it’s good or bad, we typically see a drop-off. In this case of Ethereum users, if they want this airdrop they’re actually going to have to hold through the merge and they may get this potential hard fork of these new assets right free money but this is the problem, if they don’t hold past the merge, they sell right before the event which is what a lot of traders do then they won’t be eligible for this potential hard fork airdrop but if they hold through they’ll get that potential hard fork airdrop but those assets may be worth nothing and at the same time they’re still holding on to their Ethereum past the events so they may have ran the risk of not selling it at the top right before the event