Following the upgrade, Grayscale, the world’s largest digital asset manager, planned to review and decide whether to sell the former PoW system tokens. But in a recent report, the company noted that it is extending its review.

In September 2022, the Ethereum blockchain network moved from its former Proof-of-Work system to the current Proof-of-Stake consensus mechanism. The move was necessary as the PoS consensus protocol is not energy-intensive but more secure and valuable for deploying new scaling solutions.

Grayscale Extends ETHPoW Review

According to Grayscale’s announcement, the review extension will last 180 days. This will give the company ample time to decide the manner, the time, and the possibility of selling ETHPoW – the asset after the network’s Merge in September 2022.

The asset manager cited the environmental concerns surrounding PoW, which is high energy consumption levels to validate transactions, as a critical motivator for the review. Moreover, the firm is also concerned about the uncertainty of trading venues and crypto asset custodians. It noted in the announcement that the trading venues are still not established for the EthereumPoW tokens.

Based on the report, the price of the ETHPoW may fluctuate if the crypto asset custodians support the tokens or if there’s a notable development in the trading markets.

Meanwhile, Grayscale’s review is a crucial step in adopting PoS, as the asset manager holds a significant amount of Ethereum in its Grayscale Ethereum Trust. It’s possible that through the review of ETHPoW, other major institutions will also reconsider their stance on the proof-of-work system.

Ethereum Forks Into Two Blockchains

The Ethereum network completed its Merge in September 2022, a significant upgrade. Following the Merge, the network now operates on a PoS consensus algorithm, with notable differences from the former PoW.

However, some of the community members seemed to prefer the mining system of the PoW model. This resulted in the network forking into two blockchains – EthereumPoW and the major Proof-of-Stake network.

While the ETHW may benefit community members who prefer to mine through the system, it’s also challenging for digital asset companies that offer exposure to only Ethereum. This is particularly true as some investors might desire exposure to EthereumPoW.

Meanwhile, some companies are already contributing to the challenge by planning to provide a new ETP (exchange-traded product) to facilitate investors’ exposure to EthereumW. However, given the uncertainty of its sustainability, the new ETP will serve as a backbone for the ETHW.

Meanwhile, the extension of Grayscale’s review is considered a positive step for ETH and the cryptocurrency industry as a whole. As the network continues to develop on its PoS system, the adoption of this consensus mechanism by significant institutions such as Grayscale will likely increase over time.

Featured image from Pixabay and chart from Tradingview.com

Over the past few days, Bitcoin and crypto market has been enjoying traces of bullish appearances. Most crypto assets have been in the green, with some reclaims in their values. But the northward climb has just died out as of yesterday.

EthereumPoW (ETHW) value crumbled by a whopping 11%. The Altcoins are not left in the new bearish trend. Most have taken to the south as they push the crypto market into the red. Despite several attempts, Bitcoin has again failed to hit its critical level of $20,000.

Drastic Crumbling For ETHW And LUNC

Over the last few days, there’s been a sudden cut in the latest uptrend within the crypto market. Most of the crypto assets are losing the previous reclaimed values.

Before the bearish trend, Ethereum reclaimed up to 5% in its value shooting the price of ETH to nearly $1,350. However, the past day’s price decline has brought ETH to $1,288.

EthereumPoW (ETHW) has suffered one of the worse losses of about 11%. Also, Terra Classic (LUNC) declined by about 7.5%.

Crypto assets with minor gains include Uniswap, Tron, and Leo. Losers from the large-cap altcoins include Ripple and Cardano, with over a 3% drop. Others are Solana, Polygon, Polkadot, Binance Coin, Shiba Inu, and Dogecoin.

Bitcoin Stalls Before The $20K level

Last week, Bitcoin was on a price swing with little or no control over its movement. The primary crypto asset even went down to the $18K region after several attempts to anchor its price on $20K. The release of the US job report created an impact taking BTC to $18,200

However, changes started to occur with increasing volatility in the crypto market. The leading cryptocurrency made more surges from the start of this week. The token movement stalled relatively in the early hour of Monday but later picked the same. As a result, the price of Bitcoin rose again to the $19,000 region and gradually maintained its hold on the level.

BTC later hit $19,700 this week. Also, kept looking for a more bullish push that could take it to the coveted $20K. However, the situation in the entire crypto market has suddenly twisted in a downward direction. As a result, Bitcoin couldn’t push through with a further move to the $20K level.

At the time of press, BTC is trading at around $19,092, indicating a drop over the past 24 hours. Also, its market cap is currently at $366.91 billion, and its dominance over altcoins sits at 39.88%.

Based on data from the on-chain analysis, there have been several suggestions for further pain in the future for BTC. The belief is that Bitcoin displays a similar trading trend to the 2018 bear market.

Featured Image From Pixabay, Charts From Tradingview

The ETHPoW fork proposal comes from the miners. It’s only logical that they want to keep Ethereum as a Proof-Of-Work chain, since all of their profit will evaporate overnight with the change to Proof-Of-Stake. The merge is supposedly only weeks away, and the Ethereum community has their hearts set on the proposed changes. Nevertheless, the miners have the right to fork the chain, and that’s where ETHPoW comes in.

ethpow will coming soon pic.twitter.com/v9eAbWO2BZ

— Chandler Guo (@ChandlerGuo) July 27, 2022

Our friends at Arcane Research set the stage for ETHPoW in their The Weekly Update report:

“Last week, Chinese Ethereum miner Chandler Guo launched a campaign to hard fork the Ethereum blockchain. In the beginning, both chains would be identical, duplicating any holdings. However, although the network can be technically duplicated, the value cannot.”

A year ago, we at Bitcoinist theorized about this exact situation in an article titled “Does DeFi Make Ethereum Unforkable? Here Are The Facts.” The ETHPoW saga wasn’t even on the horizon, but we said:

“Even though it’s conceivable that some of the other projects could maintain two versions, one in each blockchain, in the case of stablecoins this is simply not possible. In the thought experiment, the authors use CENTRE’s USDC.

“USDC is a system of record for dollar-backed IOUs. Only one system of record can correspond to the real liabilities of CENTRE, and so the USDC ledger is effectively meaningless on the other chain.”

Ethereum Mining Revenue: 30 Day Moving Average | Source: The Weekly Update

The Destiny Of ETHPoW Is In The Hands Of The Stablecoin Issuers

So far, Tether is yet to speak on the matter, but Centre said it will not support ETHPoW. This makes the miners case much less compelling, since as the study we cited says, “given how deeply entangled it all is, it’s incredibly challenging to extricate it quickly and safely.” Our conclusion on the thought experiment was simple, “The incentives are undeniable, “all of DeFi is forced to move together.” And it looks like DeFi will support the Proof-Of-Stake chain.

So, if there’s no way that this plan is going to work for ETH miners, why are they going through with it? Back to The Weekly Update, they pose a theory. “If stablecoins are worthless on the PoW chain, DeFi on PoW crumbles. But some exchanges will list ETHPoW, causing speculation on the asset and a race to extract as much ETHPoW from the dead ecosystem as possible.”

Is the miners’ plan that shortsighted? Or do they have an ace up their sleeves?

ETH price chart for 08/09/2022 on BinanceUS | Source: ETH/USD on TradingView.com

Incredible Technical Challenges Ahead

In an open letter to Ethereum miner Chandler Guo, The ETC Cooperative laid down the case against ETHPoW. And their reasoning goes into technical matters that are above most of us’ paygrade. For example:

“This time you will need to fork Geth (and probably also Erigon, Besu and Nethermind). Each of those codebases will need to have the POS transition logic removed, to have the difficulty bomb disabled and also to update the Chain ID to provide replay-protection. Mining software will likely have to be forked/updated as well, to provide support for that different Chain ID and maybe more. Unlike the client code, which is public and open source, lots of mining software is closed source, and you will need to persuade its authors to make those changes and then to support them.”

According to the ETC Cooperative, there’s simply no time left to coordinate everything that the miners would need for ETHPoW to succeed. However, is it guaranteed that the merge will happen in a few weeks? The Ethereum developer team has postponed the process several times before. Do the miners know something we don’t? 

In any case, The Weekly Update poses another existential threat to the miners’ plan. Simply that, “there is no community behind ETHPoW, and interestingly, the list of ETHPoW supporters consists of either mining pools or exchanges.” The exact institutions with a clear incentive to support the fork. “No dApps or infrastructure providers have publicly supported the fork. And if everyone plans to sell ETHPoW after the Merge, it is yet to be known where the bids will come from.”

Have the miners not considered all of these scenarios? Is the ETHPoW plan a plain cash grab? And if it is, where will the cash come from? Who will buy what they’re selling? Or, is there something we’re not considering? Are there backroom meetings happening as you read this? Will the miners surprise the world?

Keep your eye on Bitcoinist for the conclusion to this fascinating story.

Featured Image by Do Nhu on Unsplash  | Charts by TradingView and The Weekly Update

The ETHPoW hard fork appears to be garnering more publicity than expected. As the Ethereum community moves closer to The Merge, ETH miners are looking to fork the chain to retain mining revenue.

Some crypto entities have indicated support for this ambition, most notably Tron’s Justin Sun. However, the most recent endorsement move appears to be coming from BitMex.

BitMex will allow margin trading for ETHPoW with up to 2x leverage

Seychelles-based cryptocurrency exchange, BitMex, recently announced that it would be launching margin trading options for the expected ETHPoW fork. The announcement was made on August 8 on the platform’s official page.

According to BitMex, when the margin contract goes live, users will have access to up to 2x leverage trading against USDT-ERC20. Users can already explore the trading opportunity on BitMex’s testnet platform.

BitMex admitted that the asset which would have the ticker ETHPOWZ22, is highly speculative, and it might never exist. Hence, the exchange modified a few leverage trading items including marking method, fees, and price limits, among others.

Buterin does not see the fork as a threat to Ethereum

BitMex had earlier addressed the reality of the ETHPoW fork. On August 1, the exchange noted that the fork could garner interest from notable entities in the space.

“Although there are many technical challenges that ETHPoW faces, as long as the chain survives, it looks likely that there could be positive narratives around the coin and leading centralized exchanges are likely to list it,”

BitMex noted in the publication.

As earlier reported, Chinese miner Chandler Guo last month indicated an interest in forking the ETH chain to preserve ETH mining. This move aims to help miners retain mining revenue which would otherwise be nonexistent in a PoS ETH chain.

As The Merge brings the coalescence of The Beacon Chain and the Ethereum Mainnet, the transition to PoS would make miners obsolete. Guo and other miners do not particularly want this. Since making his intentions known, Guo has received support from certain crypto entities, including Justin Sun.

However, most Ethereum proponents have shown contempt for the fork, noting that anyone supporting it is doing so for selfish reasons. Ethereum co-founder, Vitalik Buterin said the fork does not threaten Ethereum. Buterin also added that the people endorsing it are only looking to make “a quick buck.”