The second-largest digital currency in the crypto sector has surged nearly 50 percent over the last month, climbing to around $1,600. It has outperformed multiple digital tokens, from Bitcoin to Dogecoin to Avalanche.
Industry analysts are attributing the broader market gains to growing expectations that the Federal Reserve will either slow down the pace of interest rate hikes or even choose to cut rates next year.
It might also have to do with Ethereum 2.0, the multi-phased upgrade that attempts to enhance and improve the network’s security and scalability by switching from a proof-of-work (PoW) model to a proof-of-stake (PoS) consensus. This has generated tons of buzz in the overall tech sector because some market observers purport that this could revolutionize the crypto ecosystem and potentially manufacture a new class of cryptos and develop a different set of “crypto kingpins.”
But what does this all mean for mom-and-pop traders, institutional investors, and the industry as a whole? Here is a breakdown of Ethereum’s staking initiative.
Over the last couple of years, transaction costs have soared on the Ethereum network. It has essentially become a victim of its own success, inundated and overburdened with a treasure trove of decentralized application projects. As a result, many parties have found it extremely difficult to operate on Ethereum because of so-called gas costs (the cost to perform a transaction on the network).
The solution? Establish an upgrade and introduce an Ethereum proof of stake (PoS) system.
Since 2019, the Ethereum Foundation has been working on ETH 2.0 to facilitate greater efficiency and scalability and usher in a new era of high-tech security and effective speed levels.
But to integrate a new landscape into the industry, staking has become integral. This consists of depositing 32 ETH to activate validator software. Each validator is assigned to storing data, processing transactions, and adding new blocks to the blockchain. This ensures that Ethereum is safe and secure for all market participants, allowing validators to earn new ETH rewards during this span.
In addition to generating rewards and fostering advanced security, Ethereum advocates can also take solace in the fact that stakers do not need to possess computers that consume immense levels of energy. A PoS system only requires a standard home computer or smartphone.
Now that you are acquainted with the process of staking and the intended function behind a PoS system, you might be wondering how to stake Ethereum and what steps users can take to participate in staking Ethereum.
Here are five things you must know when you are becoming an active participant in staking:
· Find a website where you can stake Ethereum.
· Select a staking method, either through a cryptocurrency exchange or a staking pool.
· Deposit Ethereum to your wallet that can then be transferred to an exchange of your choosing. The funds will then be staked.
· Move forward with a contract that outlines the operator of the staking pool, the rewards you will receive, and the length of time you wish to stake.
Many Ethereum supporters and overall crypto enthusiasts have often queried Google on when is Ethereum moving to proof of stake.
Indeed, it has been a long time in the making. The original launch date of ETH 2.0 was 2019. When the delay was announced, the industry was disappointed by the news because of how much of a big deal it would be for everyone involved in the sector.
The Ethereum Foundation officially announced the launch date for ETH 2.0 would be sometime on September 15 or 16, following several successful tests.
An Ethereum Foundation-sponsored party in Vancouver on August 5 celebrated the news, with many speakers promising big things for the cryptocurrency and the overall protocol.
Today, about two-thirds of the cryptocurrency market is controlled by just two tokens: Bitcoin and Ethereum. But there is growing talk that Ethereum could soon exceed Bitcoin as the world’s top digital currency. Is this feasible?
A wide array of market experts say that Ethereum could finish the raucous 2022 somewhere in the range of $4,000 and $5,000. If accurate, this would be an impressive rally. However, Coinpedia suggests that Ethereum prices could touch nearly $13,000 sometime this year if the transition to Ethereum 2.0 turns out to be a smashing success.
Meanwhile, JPMorgan Chase analyst Kenneth Worthington had this to say about higher revenue generation in the post-transition economy:
“We see the staking revenue opportunity bigger (proportionally) than the income opportunity given we expect Institutional staking clients will contribute meaningfully to Eth staking revenue, but much less so for Institutional customers. The vast majority of the economics remains with retail.”
Until then, Ethereum will continue to enjoy the latest momentum, make certain that the shift to Ethereum 2.0 becomes one of the most consequential decisions in the crypto industry, and set its sights on more gains and advancements heading into 2023.
Ethereum to the moon?
Bitbuy now offers Ethereum staking for Canadians in a safe and regulated environment. Learn more on how you can effortlessly start earning staking rewards here.