• Thu. Aug 11th, 2022

Ethereum’s ability as a value storage

Bywiret

Aug 6, 2022

Citigroup predicted that Ethereum’s ability as a value storage means will be higher after completing the Merge upgrade, which converts the consensus mechanism from the existing PoW to the PoS method.

Citigroup, a Wall Street investment bank, predicted in a report released on the 4th (local time), saying, “The Ethereum blockchain will produce various results through a scheduled merge upgrade.”






Citigroup predicted that after Ethereum switches to the PoS method, energy use can be reduced and converted into deflationary assets, and that sharding technology, which increases network processing capacity by distributed storage of data stored on nodes, can move to a more scalable future.

“Mergie is the first of Ethereum’s five upgrades, which will reduce block time to speed up transaction processing by about 10%, while laying the foundation for executing the next upgrade, Surge, and processing 100,000 transactions per second,” he predicted.

Merge will shorten the block time from 13 seconds to 12 seconds, which is expected to speed up while slightly lowering the commission (gas cost).

Citigroup said, “In particular, the transition from PoW to PoS will reduce Ethereum issuance by 4.2% every year, which will deflation Ethereum,” adding that it will eventually further improve its role as a means of value storage. It also said that Ethereum will be transformed into a return holding asset with cash flows, allowing such potential cash flows to use various valuation methods that are not available now.

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