on the crypto
Cryptocurrencies have suffered more falls than rises this year. The total value of the cryptocurrency market has dropped from over $ 2.000 trillion to just $ 1.000 trillion. But it is important to remember that this is due to the general market sentiment. In times of economic difficulty, the Investors they withdraw from risky assets.
If we look specifically at the various cryptocurrencies, we can find a lot of interesting news. Indeed, two major operators are ready to launch key updates in September: Ethereum and Cardano. That's why this month could be crucial for these blockchains and their investors.
1 Ethereum
Ethereum, the second largest cryptocurrency in the world by market capitalization, plans to launch the Merge around September 15th. This is part of a general update aimed at reducing energy consumption, network congestion and transaction fees. The big update will also increase the speed of transactions on the blockchain.
How will all this happen? Through the transition to the proof-of-stake validation process from the proof of work. And through sharding, a method of dividing tasks on the network.
The blockchain has already started the process. It launched the Beacon chain as proof of stake. This eliminates the complex calculation operations required to validate transactions. Instead, the power of validation goes to the major stakeholders. This will reduce energy consumption by more than 99%.
This month, Ethereum will merge the Beacon chain with its mainnet. And proof of stake will become the permanent validation method. The sharding is scheduled for next year. This will take care of congestion, transaction fees and speed. All fundamental elements for future success.
2.Cardano
Cardano has something in common with Ethereum. Charles Hoskinson participated in the creation of both blockchains. First he took care of Ethereum, then he moved on to launch Cardano. Now both projects have one more thing in common: major updates on the way.
Cardano aims to launch Vasil's hard fork this month (we don't have a specific date). This is a major update intended to improve the user experience and the ability to scale operations in the future.
One of the elements of this update includes pipelining. This has to do with how blocks of data move across the network. Usually, a block goes through several steps, one after the other. Pipelining allows some of these steps to occur at the same time.
Hoskinson even predicted in a tweet this spring that decentralized application developers are waiting for Vasil's hard fork before rolling them out.
And there's more to come. Cardano is also working on the Hydra Head scaling solution. This important project will help Cardano increase the speed and volume of data it can handle simultaneously and reduce the time it takes to complete a transaction.
What does this mean for investors?
The updates scheduled for September could give Ethereum and Cardano a boost if all goes well. Both cryptocurrencies have seen double-digit declines this year.
However, if these updates run into problems, investors won't be happy. And this could bring the prices of Ethereum and Cardano down further. We may also see some volatility this month as investors speculate on the outcome of the updates.
Considering the potential volatility and the risk of any hitches in launching updates, conservative investors may not want to take the leap right now. It is probably best to wait until this key moment has passed.
That said, I remain positive about these two cryptocurrency leaders over the long haul. So, if you are able to tolerate some volatility and the risk of jolts along the way, this could be a great time to get into this story.
