Crypto: Ethereum merge will shift asset to proof-of-stake model on September 15
Yahoo Finance reporter David Hollerith explains what will happen when the ethereum merge takes place on Thursday, Sept. 15, and how it will impact crypto prices.
Video Transcript
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RACHELLE AKUFFO: All right, shifting gears to take a look at crypto now. Ethereum trading lower by about 1 and 1/3 of a percent today, just hours before the event known as the Merge is set to kick in. Our crypto reporter Dave Hollerith is here to explain more about what's happening to the Ethereum network. David, what can you tell us?
DAVID HOLLERITH: Rachelle, as you pointed out, tonight around 1:00 AM, Ethereum, the most widely used blockchain protocol, is completing this software upgrade. Now, called the Merge, the event itself is going to take about 12 minutes. And most of the crypto industry is going to be watching. And the important context here is that that's because this is the largest upgrade in crypto's 13-year history. It was originally scheduled for 2017 and has taken an extra five years to get to this point.
To give you an idea of how much money is on the line for this upgrade, Ethereum holds a market cap on par with a mega cap publicly-traded company, such as Wells Fargo, Walt Disney, or, on a good day, Toyota. Essentially, this upgrade, if it proves successful, it has implications not just for the Ethereum blockchain and its cryptocurrency Ether, but also for crypto more generally. This is sort of a touchstone moment to show what a crypto project and its developer and user community sort of can accomplish together.
But that being said, as you pointed out, Ether is down currently, right now. And the technical upgrade isn't expected to have much of an impact in terms of price dynamics directly. What it will do, though, is cut the energy consumption of Ethereum by 99.95%, which is a big boon, obviously, to-- for investors who have pointed out or criticized cryptocurrencies for having a higher energy consumption.
On the technical side, for the upgrade itself, there's very little risk that can unfold right now. But there is this whole other realm of possibilities that has to do with the fact that, operationally, other companies have to sort of figure out what to do once the merge takes place. But in general, I think we'll all wake up tomorrow and see what will happen.
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And pretty much--
RACHELLE AKUFFO: [INAUDIBLE]. It'll be one watch [INAUDIBLE].
DAVID HOLLERITH: Sorry, go ahead.
RACHELLE AKUFFO: Oh, was there anything you needed to add? I know we're running out of time, but I wanted to make sure we got everything out--
DAVID HOLLERITH: Oh, no.
RACHELLE AKUFFO: --so we have all the information before the merge tomorrow.
DAVID HOLLERITH: No, I was just going to say, we'll wake up tomorrow, and we'll figure it out. [CHUCKLES]
RACHELLE AKUFFO: As we do in the world of crypto. A big thank you there, Dave Hollerith, for joining us.
