Despite the October 19th launch of the first Bitcoin Futures ETF, an Ethereum network update has helped the cryptocurrency outperform Bitcoin in the last week.
On Wednesday, Ethereum engineers will complete the Altair update, which will aid the cryptocurrency’s transition from proof-of-work to proof-of-stake following the launch of Ethereum 2.0. Ethereum has transitioned to a proof-of-work network, which requires miners to execute blockchain transactions.
Ethereum 2.0 is scheduled to become operational later this year.
Proof-of-work is a computationally costly method of validation due to the significant amount of computer power required to perform the calculations.
Proof-of-stake is a novel approach to addressing environmental concerns associated with cryptocurrencies and the electricity and energy they require. Fundamentally, proof-of-stake means that a person’s mining or transaction-validation power is proportionate to the number of coins they possess; the more coins a miner has, the more mining power they have.
Environmental problems around bitcoin mining have impeded widespread institutional acceptance. Elon Musk, the CEO of Tesla (NASDAQ:TSLA), declared earlier this year that his company will no longer accept Bitcoin as payment for its vehicles because to the mining and transactional impact on the environment. Musk has now declared that Tesla will almost certainly resume accepting Bitcoin in the future.
Ethereum outperforms the market
Ethereum has gained about 8% in the last week, compared to Bitcoin’s 2.5 percent decline before to the upgrade. Ethereum’s year-to-date gain is about 470 percent, compared to Bitcoin’s 115 percent gain.
Ethereum’s outperformance over the previous year has coincided with a boom in interest in Decentralized Finance (DeFi) applications and non-fungible tokens (NFTs).