- Ethereum 2.0 enhancements seek to increase network efficiency but will only add a layer of bureaucracy to the world of cryptocurrencies according to Richard Heart, founder of Hex and Pulse.
- He anticipated that the price of ether could fall to $ 1,700 sometime in the next 8 or 9 months in the current bear cycle.
- Heart explained the differences between the three core algorithms for cryptocurrency transactions: proof of work, proof of stake, and proof of wait.
Richard Heart has mixed feelings about the wave of updates to the network this year. “I think EIP 1559 will be good for the price of ether,” cryptocurrency founder hex y pulse told Insider.
Ethereum 2.0 is horrible. I don’t know why they designed that system so badly.
Heart was referring to Ethereum Enhancement Protocol 1559 (EIP 1559), a fork that will destroy some ether tokens that will reduce the total offering launched last Thursday. And to Ethereum 2.0, which will restructure the algorithm of the network.
Both were designed to reduce the volatility of ether, the native cryptocurrency of that network. Since it has fluctuated in 2021, it took off at $ 730 at the beginning of the year and reached almost $ 4,000 in May; to later collapse towards $ 2,000.
Heart said that by burning coins, EIP 1559 will stop miners from disposing of cheap ether, and this will reduce the environmental impact.
However, he predicted that it will take half a year for it to start to positively impact the price of ether; which went up about 4.7%.
In the 24 hours after the launch of the new protocol, it reached about $ 2,727 on the Kraken exchange.
“Maybe the market has already discounted it, these things are usually events of” buy before the rumor, sell before the news, “he said.
Heart said that Ethereum 2.0 enhancements, which seek to increase network efficiency, will actually only add a layer of red tape to the world of cryptocurrencies.
“It costs you 32 ethereums to become a validator, that’s roughly $ 80,000 for the privilege of buying yourself a network administrator job on the server,” he said. “Nobody likes that, so they give their coins to someone else and add an intermediary.”
Heart stated that he believes the cryptocurrency market is in a bear cycle. He predicted that bitcoin will drop to around $ 10,000 and dogecoin will drop to two cents.
He anticipated that the price of ether could fall to $ 1,700 sometime in the next 8 or 9 months in the current bear cycle.
“Elon Musk and Michael Saylor buy the top and then wonder why the price is going down,” he said. Maybe we’ll get to $ 3,500 in ether, maybe. But we could start descending right now. Once you have the older kids on board, there is nowhere to go but down. “
Here are the differences between Proof of Work, Proof of Stake and Proof of Hold
Lastly, Heart discussed the differences between the three core algorithms for cryptocurrency transactions: proof-of-work, proof-of-stake, and proof-of-wait.
The proof of work is used to validate bitcoin mining. Although it was considered revolutionary during the founding of the cryptocurrency in 2009. This is an energy intensive process that causes environmental damage.
“The proof of work in bitcoin is used to make sure that what people say is the state of the network is accurate,” Heart told Insider.
Heart said the proof of stake, which underpins its new cryptocurrency pulse, was a clear improvement over the proof of work.
This is based on the designated validators finding a consensus to approve the transactions. Ethereum 2.0 will implement a proof of stake for ether trading.
“You can replace proof of work with proof of stake, but you still have to invest a lot of money and you have capital at risk, it’s like having a performance bonus,” said Heart.
Heart’s hex token determines block winners and mining rights using the wait test, also known as the elapsed time test. Many see this algorithm as more efficient and as an alternative that uses less energy than proof of work.
“Hex replaced bitcoin’s proof-of-work with proof-of-wait and added time lock to monetize time,” Heart said.
“Bitcoin would destroy the entire planet if it became valuable enough, because the amount of energy waste required to defend the network is directly proportional to the value of the network,” he added.
That is why the waiting test and the participation test are evolutions superior to the working test.
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