Ethereum completed its “Merge” on Thursday, introducing a new way of validating its network that it says will make the cryptoasset more secure and less energy intensive.<\/p>\n
Nick Kuriya, vice-president and head of crypto at Purpose Unlimited, said a “technical upgrade of this nature has never occurred in the history of crypto.”<\/p>\n
Purpose Investments offers the Purpose Ether ETF, which has $229.4 million in assets under management.<\/p>\n
The upgrade saw Ethereum’s main network (Ethereum Mainnet) merge with the Beacon Chain system for block production. The outgoing Mainnet used a “proof of work” system that required crypto miners to add digital currency to the blockchain. The Beacon Chain uses a “proof of stake” system of validators who authenticate transactions and add new blocks to the blockchain.<\/p>\n
In a commentary earlier this week, Purpose crypto specialist Haan Palcu-Chang wrote that the merge will lead to faster transactions, lower network fees, and better security through decentralization, as the network will use more validators.<\/p>\n
“The more validators spread out over a larger part of the globe, the less likely the blockchain can be abused by bad actors or suffer from power shortages or natural disasters,” Palcu-Chang wrote.<\/p>\n
The merge will also reduce energy consumption by more than 99%.<\/p>\n
“That’s significant because I think we all recognize the impacts of climate change and the potential impacts going forward,” Kuriya said.<\/p>\n
Lower emissions could make the asset more appealing to ESG investors.<\/p>\n
The change could also offer a more tangible opportunity for investors. To become a validator, “stakers” put down down deposits of their own Ether as collateral against dishonest behaviour, and they can earn more Ether by validating transactions.<\/p>\n
Kuriya compared the “staking yield” — which he said is currently 4.5% but subject to change — to a dividend-paying equity.<\/p>\n
The upgrade also introduces a “burning mechanism” that reduces the supply of Ether, which could make the cryptoasset more attractive.<\/p>\n","protected":false},"excerpt":{"rendered":"
The long-awaited change has implications for investors<\/p>\n","protected":false},"author":179881,"featured_media":411067,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[2312,2318],"tags":[102170,2474],"yst_prominent_words":[25308,24739,21648,19698,19266,16646,10679,7791,6700,5058,4153,4106,2235],"acf":[],"_links":{"self":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/451366"}],"collection":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/users\/179881"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/comments?post=451366"}],"version-history":[{"count":4,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/451366\/revisions"}],"predecessor-version":[{"id":451513,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/451366\/revisions\/451513"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media\/411067"}],"wp:attachment":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media?parent=451366"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/categories?post=451366"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/tags?post=451366"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/yst_prominent_words?post=451366"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}