If you feel involved in all the hype surrounding Ethereum’s imminent upgrade, you’re not alone.
Google search for “Etherium Marge” has been on the rise in the last 12 months and has recently peaked.
In addition to all interest, the price of Ether has also risen. It approached $ 3,350 this morning, hitting a two-and-a-half-month high. It is currently trading at around $ 3,406 and has risen 6% in the last 24 hours. Last week it was almost 19%.
Ilan Solot, a partner of the Tagus Capital Multi-Strategy Fund, a blockchain-focused venture capital fund, told CoinDesk.
“FOMO has started pre-merging ETH.”
So is FOMO justified? Maybe a little.
After all, the merger is “a really big deal,” said Matt Hogan, chief investment officer at Bitwise Asset Management. luck“The market will price this change for several months. If the integration is successful, ETH will be one of the most popular crypto assets for institutional investors for the foreseeable future.”
This is what drives all the feel.
But why all FOMO?
Ethereum now relies on what is called Proof of Work. This process requires the miner to complete a complex puzzle, validate the transaction, and create a new coin. This process requires a great deal of computer power and is often criticized for its environmental impact.
With the planned upgrade, Ethereum will move to Proof of Stake. This allows users to validate transactions according to the number of coins donated, or “stake.”
If done as planned, merging can be an important milestone for several reasons.
First, crypto mining on Ethereum will be abolished, significantly reducing the environmental impact of blockchain. As less coins are expected to be issued after the merge, the supply of Ethereum after the merge will also begin to decline, thereby increasing its rarity and price. Blockchain’s security against potential attacks will probably increase. In addition, all of the above upgrades are expected to increase organizational investment in the Ethereum network.
There is no official schedule for the merger yet, but there are expectations that the merger may take place this summer.
All of this has led to higher Ether prices, which are reflected in the current surge.
“I think ETH’s strong performance these days is partly due to expectations for the merger,” Hougan said.
There is a lot of hope, but there are still risks
The growing attention of the mainstream media surrounding the merger may also contribute to the hype and subsequent FOMO.
“I think non-cryptocurrency natives are starting to notice merging for the first time. Until a few weeks ago, there wasn’t really much discussion about merging outside of crypto channels,” he said. On top of that, institutional investors are hearing about it, people understand what it is. “
Note that the chances of a successful merge are “a source of understandable excitement, but of course not without risk. This is a very high stakes technical upgrade and is delayed or problematic. May occur. In the implementation. “
This story was originally featured on Fortune.com