The blockchain platform Ethereum is in the process of upgrading to provide faster, better services for digital payments, smart contracts and use of its Ether (ETH) cryptocurrency. These changes can’t come too soon for the platform. ETH experienced a huge drop in value in recent months even though it has historically been second in value only to Bitcoin. Yet, competition is on the horizon from a few other older platforms like Ripple’s XRP, which has been around since 2012.
That said, on Tuesday, March 22, 2022, a huge investment of more than $100 million ETH into a staking pool by a major crypto fund boosted the value of ETH above $3,000 and showed why Ethereum isn’t a lost cause. Ethereum’s planned upgrades are credited as the prompt for the investment. Many other companies are expected to invest in it soon so that they’re already in place to enjoy huge returns on their investments by summer.
The Biggest Changes
Ethereum has been using the antiquated Proof-of-Work (PoW) consensus model to validate transactions on its blockchain. PoW is too energy-intensive and less secure than a Proof-of-Stake (PoS) model. With the latter, an Ethereum user would put up an ETH stake from their account into a staking pool to receive permission to validate transactions and create new blocks. An algorithm would then randomly select them to perform the latter. By this summer, Ethereum plans to have a full PoS model in place by merging the Beacon Chain of Etherium 2.0 and the mainnet.
With this upgrade and a wide range of other changes, users can expect a more environmentally friendly blockchain that offers better storage, more secure transfers and greater passive investment of ETH opportunities. An announcement about a recent test by Ethereum last week showed that the platform can make it happen, which is what likely prompted the massive infusion of money from the crypto fund this week.
The other big favorable change is the speed at which transactions take place. Ethereum’s network is expected to support at least 100,000 transactions per second (TPS). For comparison, Ethereum on a good day typically only manages 7 TPS on average and can only process between 15 and 45 TPS as outliers. On average, Ethereum’s biggest competitor Bitcoin also only manages 7 TPS. Ripple manages approximately 1,500 TPS. Another platform and altcoin, Bitcoin SV, is more than 128 times larger in block size than Bitcoin and previously managed to reach 50,000 TPS at peak.
Is Now the Time to Invest?
Many financial experts recommend investments in less volatile, non-digital currencies and other types of investments overall. Digital currencies often lose value rapidly after only slight changes in interest. For example, as NFT interest waned on Ethereum and shifted to other less expensive platforms, the value of ETH fell.
The good news is that with all of the changes coming to Ethereum soon and growing evidence that these changes aren’t empty promises, it’s an excellent time to invest in Ethereum’s ETH. It’s also a great time to start investing in other cryptocurrencies like Ripple XRP. Even a small investment in historically strong cryptocurrencies right now could result in big returns by no later than the end of summer.