For more than a decade, one of the pervading views on the world of cryptocurrency has been a “Wild West” mindset. Wonks have declared crypto to be the future of finance, while newcomers continue to approach it with skepticism.
But what would it take for the “Wild West” view to dissipate? One possibility is that the Ethereum blockchain’s ປ້ອນຂໍ້ມູນ, which transitioned it from proof-of-work to proof-of-stake, would bring some much-needed clarity to crypto.
However, while the Merge may be one of the earliest steps, additional efforts will be needed to tame the Wild West.
Regulations are the key to taming the Wild West
Most people see cryptocurrency as “wild” because of the lack of oversight in the space. Thus, regulations would change the industry dramatically, and Europe is taking steps in this direction. Earlier this year, the European Union established new laws requiring crypto-related firms to secure a license and put safeguards in place for customers. Without compliance, companies won’t be allowed to issue or sell digital tokens in the EU.
At this point, cryptocurrency has been around for more than a decade, but little has been done as far as regulation. In the U.S., the various regulatory agencies are vying for control over the crypto market. In particular, the two key agencies sparring for dominance are the Commodity Futures Trading Commission and the Securities and Exchange Commission.
The primary question is whether cryptocurrencies should be declared commodities or securities, with the former requiring less regulation under the CFTC’s authority and the latter requiring more under the SEC. The debate over classification continues for now.
What about Ethereum’s Merge?
While applying regulations to the world of crypto will go a long way toward taming the Wild West, Ethereum’s Merge could also have an impact. The Merge transformed Ethereum from proof-of-work to ຫຼັກຖານສະແດງຂອງສະເຕກ by combining the blockchain’s Mainnet with the Beacon Chain.
The shift to proof-of-stake has been widely publicized, with one of the most-touted benefits being a dramatic reduction in the amount of electricity consumed with every ether transaction. Bitcoin, the original cryptocurrency, follows a proof-of-work protocol, which means vast amounts of computing power are required to complete transactions on the blockchain. Powerful mining rigs solve complex mathematical problems, rewarding their owners with newly minted bitcoins.
On the other hand, proof-of-stake blockchains operate through staking, which requires users to lock up a certain number of their tokens for the privilege of receiving more tokens. After the transition to proof-of-stake, ether will require users to stake at least 32 of their tokens in order to validate transactions and earn a fee in tokens for their interest.
The Ethereum blockchain randomly chooses staked users to validate each transaction, giving the priority to the users who have staked the most ether tokens and earning them some additional tokens in the process. Users who stake their cryptocurrency make their tokens available for use in the proof-of-stake process and typically earn what amounts to interest on what is essentially a deposit (although the technical vocabulary terms used are different).
Will the Merge affect the Wild West?
Making the most of the gold rush
Unfortunately, uncertainty continues to rule the market, so it’s even easier to lose vast amounts of wealth than it is to build significant wealth by trading cryptocurrency. Thus, innovative new crypto ecosystems like those created by ໂທເຄັນຕາມລະດູການ ແລະ Solana, which touts itself as the world’s fastest blockchain, are quite welcome.
Unlike many other blockchains, the Seasonal Tokens blockchain appears to have been created largely for investors, and it’s totally unique. The ecosystem contains four tokens: Spring, Summer, Autumn and Winter.
Of course, all tokens are impacted by macro factors like inflation and interest rates, just as other cryptocurrencies are. However, the developers behind Seasonal Tokens claim investors can trade them with a bit more certainty than with other cryptocurrencies because they are designed to rise and fall in predictable, preset patterns based on their relationships with each other.