Source: https://upload.wikimedia.org/wikipedia/commons/e/e9/Storing_Ethereum_Coin_in_Wallet.jpg

When Will Ether Upgrade Transpire, Allowing it to Eclipse Bitcoin?

When it comes to crypto currency, Ether (ETH) and Bitcoin (BTC) together dominate with 60% of the crypto market share. When compared to each other though, ETH' market capitalization of $363 billion is less than half of BTC.

Where does one get crypto currency anyway?

In a quick synopsis of the how - Both Bitcoin and Ether are mined, or produced, using a proof-of-work (POW) method. In this process, thousands of miners, or network nodes, compete to solve complex mathematical puzzles. Whoever can solve the puzzle first, earns the reward in the form of that crypto currency. 

The problem with this method is that it is a massively power-thirsty process that’s estimated to cause more pollution than a small country every year, fostering fears about crypto in a low-carbon world.

An alternate to POW is proof-of-stake (POS) method. POS, much less power because instead of using millions of computers race to process and solve complex mathematical puzzles, it allows nodes that stake the most coins to validate transactions. 

What does this have to do with ETH dominance over BTC?

BTC, for better or worse, is an asset class that has high value, but not much real world usage. In the world of crypto currencies and smart contracts, ETH has become the defacto choice. Due to POW method, ETH suffers from speed of transactions and processing, stemming from mining power required. In its current from, ETH can only processes 30 transactions per second (TPS) as a POW blockchain.

Once ETH switches from POW to POS method, it is expected to process as many as 100,000 TPS. This allows ETH to not just bypass ETH, but also to compete better with smaller altcoins such as Solana and Cardano. 

How will ETH switch from POW to POS happen?

ETH developers are working on an upgrade to its Ethereum blockchain, which is supposed to happen in June of 2022. The upgrade referred to as the "merge", will make ETH faster, cheaper, more secure (due to limited number of coins being mined) and less power hungry. The upgrade or merge, had led investors to believe that ETH dominance is inevitable and is now dubbed as "the flippening" in crypto world. 

“We are seeing funds rotate into Ethereum in preparation for the merge, even though we don’t know when it’s going to be,” said Noelle Acheson, head of market insights at Genesis Trading. The buying interest, she said, did “hint that more funds seem to be appreciating that (Ethereum) is perhaps undervalued at this stage”.

What is the timing of this merge?

The merge timelines have been a moving target, which is becoming frustrating for investors. Ethereum lead developer Tim Beiko said on Twitter. 

“It won’t be June, but likely in the few months after,” Beiko wrote in his tweet. “No firm date yet, but we’re definitely in the final chapter.”

“The timeline for seeing this launch continues to extend,” said Brendan Playford, founder and CEO of decentralized financial data platform Masa Finance.

The timing of the merge – Ethereum’s EH1 chain will meld with a new chain to create ETH2 – remains unclear, although many crypto watchers expect it to happen some time this year.

“Ethereum maxis, people who believe in ‘the flippening’, believe it will come very soon,” said Acheson at Genesis Trading. “But it is only a theory and it remains to be seen.”