Don’t Expect Major Price Reaction As Ethereum Forks to PoS
The Ethereum ecosystem is looking forward to Ethereum’s Constantinople hard fork which will take place later this week if nothing changes. Following the previous postponement last month, Feb. 28 has been chosen by the team to hold the updates at block number 7,280,000. Though the implications of these forks on the broader blockchain industry are indeterminate for now, some experts have signaled it would yield an overall positive outcome for the ecosystem though a major price reaction may not happen.
Ethereum powers more decentralized applications (dApps) on its blockchain than other platforms at the moment. The public blockchain currently manages billions in value hence the fear that a hitch in a fundamental protocol upgrade could pose some risk to disrupt its network’s services. However, insiders look to the success of the pending non-contentious upgrade and how such would reflect on the state of Ethereum’s infrastructure rather than its token’s price.
“The upcoming Ethereum upgrade is an exciting milestone in the largest and most evolved blockchain technology and community,” says Jehan Chu, co-founder of Kenetic in a media statement. “While I don’t expect a major price reaction, its delivery will send an important and encouraging signal to the thousands of developers building on Ethereum, and the hundreds of enterprises like Levi Strauss, JP Morgan, and the UN World Food Program. Massive change arrives in miniature steps, and Constantinople is simply the latest successful step in the journey to a better Internet.”
The fork presents an adventure that could be worth exploring. It is Ethereum’s point of splitting from the Proof-of-Work (PoW) model just like Bitcoin to a more scalable consensus protocol known as Proof-of-Stake (PoS). Benjamin Scherrey, the Group CTO of HotNow, a gamified online-to-offline economy that enables users to get real-world value from a virtual world, sees the consensus protocol to be the most fundamental and intrinsic aspect of any crypto ledger.
He says: “Moving from the purposefully computationally expensive proof of work model, also somewhat unaffectionately known as “proof of waste” due to its high energy costs, to a model that more directly aligns rewards for mining with actual “skin in the game” proposes to make Ethereum more fair and transparent.” Scherrey also adds that forks should be considered a ‘natural evolution’ of crypto ledgers technology but more evolutionary than revolutionary and essential “to ultimately demonstrate their revolutionary impact.”
For the founder of CloseCross, Vaibhav Kadikar, Ethereum’s switch from PoW to PoS would make the network faster and transactions cheaper in the longer term. As a result, Constantinople could be a significant step in scalability gain that can help bring the Ethereum community’s “collective aspiration of real-time on chain transactions closer to fruition.”
“Despite any potential disruption or other issues, Ethereum still maintains a significant advantage in terms of developer commitment to the platform. We, as part of the Ethereum ecosystem, are looking to understand, through this and subsequent forks, the impact these forks will have on our existing work and code following the upgrade, and what effect this might have on network usage and costs”
The team has been cautious of the fork which has been expected over the past six months. The upgrade’s successful execution will demonstrate their ability to identify and prevent risks while advancing the technology.