Ethereum Successfully Completed The Merge

The Merge, which took place early Thursday morning ET, will cut Ethereum’s energy consumption by an even bigger margin than previously expected, a new analysis finds. It’s also expected to slash the cryptocurrency network’s greenhouse gas emissions dramatically. Ethereum’s electricity use is expected to drop by a whopping 99.988 percent post-Merge, according to the analysis published today by research company Crypto Carbon Ratings Institute (CCRI). The network was previously using about 23 million megawatt-hours per year, CCRI estimates. Moving forward, it’s expected to use just over 2,600 megawatt-hours per year. To help visualize just how massive this is, the report compares this reduction to the Eiffel Tower shrinking to the size of a Lego toy person. That dramatic change, CCRI estimates, should reduce Ethereum’s total carbon dioxide emissions by 99.992 percent. The network’s climate pollution drops from roughly 11 million tons of CO2 emissions a year to around 870 tons, which CCRI says is slightly less than the amount of energy 100 homes in the US would use in a year.

The new report was commissioned by ConsenSys, an Ethereum software company. Ethereum co-founder Joseph Lubin also founded ConsenSys, which was also involved in the research and development of The Merge. The report is in line with other estimates. Alex de Vries, a researcher who runs the website Digiconomist that tracks Bitcoin and Ethereum energy use, similarly estimates that Ethereum’s electricity demand has fallen “99.98%, which comes down to possibly as much as a country like Austria requires.” Before The Merge, the Ethereum Foundation had estimated that the software update would reduce energy use by 99.95 percent. The enormous pollution reduction comes from a change in how Ethereum users earn new tokens. (For more details, check out our in-depth explainer on how that happened.) With The Merge, Ethereum is getting rid of a mechanism called proof of work that uses vast amounts of computing power to validate blocks of new transactions. Proof of work required crypto miners to solve computational puzzles, an extremely energy-intensive process, in order to validate new blocks on the chain and earn new tokens in return. Now, Ethereum uses a new mechanism called proof of stake that gets rid of puzzles and mining. Instead, validators need to stake some of their tokens for a chance to validate new blocks of transactions and be rewarded with tokens in return. You still need computers to store data and verify transactions. And validators will probably still run their hardware around the clock. But their hardware won’t be nearly as energy-hungry as crypto miners’ data farms. The small discrepancies in estimates for energy consumption post-Merge have to do with how many validators there are, what kind of equipment they’re using, and whether it runs on clean or dirty energy. The successful launch of The Merge places greater pressure on other cryptocurrencies still using proof of work. The elephant in the room is Bitcoin, which is currently estimated to gobble up more electricity per year as the country of Kazakhstan. “[The Merge] is hopefully a step into a more sustainable future for cryptocurrencies,” says Uli Gallersdörfer, co-founder and CEO of the CCRI. Some miners are resisting the change, hell-bent on keeping the existing proof-of-work Ethereum blockchain alive, which could limit the total energy savings. “It does mean that the total amount of energy that’s going to be saved here [with The Merge] could be less than 99.99% if there is a proof of work Ethereum surviving and it continues to support some amount of mining activities,” says de Vries. How much pollution that rogue chain is responsible for will depend on how valuable its new token is, which is expected to officially launch within a day. The value has to be high enough to sustain miners’ energy costs, after all. The price of that forked Ethereum token briefly surged in the hours immediately after The Merge before quickly falling.

Coinbase Stock Crashes As Value of Cryptocurrencies Hit New Lows

Coinbase stock is plummeting amid the ongoing Bitcoin crash. What was once known as one of the highest-value cryptocurrencies has decreased in price by almost 20% over the past ten days. Having fallen below $30,000 USD, the cost of Bitcoin is now 50% lower than its record high of nearly $69,000 USD, per CNN. The price of Ethereum has similarly fallen, down more than 35% since the start of the year. As a result, shares in Coinbase, the United States’ largest crypto exchange, are down by more than 75%, currently priced at about $54 USD per share, and are trading at 85% below their all-time high price from November, per CNN.

In its first-quarter earnings report, published on Tuesday, Coinbase reported a quarterly loss of $430 million USD and a sharp decline in overall users and trading volume. What’s even more alarming is that in the event that Coinbase declares bankruptcy, users may lose access to their assets. In the report, Coinbase noted that in the event it declares bankruptcy, “the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings.” Per these proceedings, Coinbase users would be treated as “general unsecured creditors” and unable to lay claim to specific properties. In other words, users would be blocked from their accounts and funds. Coinbase CEO Brian Armstrong attempted to reassure the platform’s users in a series of tweets posted Tuesday evening. “Your funds are safe at Coinbase, just as they’ve always been,” he wrote. Armstrong went on to assert that Coinbase poses “no risk of bankruptcy” but included its bankruptcy risk factor message due to a disclosure required by the SEC (U.S. Securities and Exchange Commission) for public companies that hold crypto-assets for third parties.

Axie Infinity Dominates Non Fungible Token

There is always a bull market somewhere. While the crypto market might seem boring now with its rangebound bitcoin (BTC, +1.56%) trading, the non-fungible tokens (NFT) space continues to buzz. One lesser-known coin coming out of the NFT industry has charted a triple-digit price rally in two weeks. Axie infinity shards (AXS) isn’t an NFT per se but the governance token of the Axie Infinity platform, an Ethereum-based digital marketplace for the game Axie Infinity. AXS has nearly quadrupled in price to $11 since June 22, according to data source Messari.

 

Such gains have given the AXS token a market value of $638 million. While bitcoin’s dip to $28,800 observed on June 22 was short-lived, buyers largely remain on the sidelines, leaving the cryptocurrency locked in the range of $30,000 to $40,000. But in the search for yield, buyers are turning elsewhere. “AXS has been on a tear,” Denis Vinokourov, head of research at Synergia Capital, said. “With all the yield compression in bitcoin futures and decentralized finance, the hot money is now flowing into NFTs.” Axie Infinity is a blockchain-based trading and battling game that allows players to collect, breed, raise, battle and trade token-based creatures known as “axies,” which are digitized as their own NFTs. Per Startups Zone, new players need to buy at least three axies, while existing players are rewarded for breeding new axies. Players can trade axies with their AXS tokens, stake their coins for weekly rewards and participate in governance voting. AXS tokens can be purchased, traded, or earned through playing the game, and their maximum supply is capped at 270 million. These tokens can be exchanged for other cryptocurrencies. The gaming-NFT economy has boomed in recent weeks. With a 30-day trading volume of $185 million, Axie Infinity has surpassed NFT heavyweights including NBA Top Shots, OpenSea and CryptoPunks to become the world’s biggest digital marketplace, as ranked by their average daily volume over the past seven days, according to DappRadar. What’s more impressive is that Axie Infinity has generated more revenue than Aave, Compound, Uniswap, and other decentralized finance (DeFi) protocols over the past 30 days, data tracked by Token Terminal shows. Axie Infinity generates revenue from axie sales, land sales, axie breeding fees and marketplace fees. With a cumulative volume of $30 million, Axie Infinity leads PancakeSwap, ranked number two, by a margin of 48%. Curve, Ethereum’s biggest DeFi protocol by total value locked, has generated only one-tenth of Axie’s 30-day revenue. The boom in the play-to-earn economy comes amid falling yields in the bitcoin and DeFi markets. For example, borrowing rates for tether (USDT, -0.03%), the largest stablecoin by market value, have declined to 2.84% on Compound and 1.43% on Aave, from over 10% three months ago, according to LoanScan. Lending rates have also seen a similar decline, converging with the current 1.41% yield offered by the U.S. 10-year Treasury note. “With the speed at which money appears to be entering the space, the increased stablecoin supply may make it so DeFi never quite sees the consistent 10% plus yields of the last year, a trader told The Defiant. Therefore, the search for yield could continue to drive demand for Axie Infinity and other play-and-earn setups. “All things NFT will likely be the main beneficiaries of the said hot money flow,” Vinokourov said, adding Rarible, also an NFT marketplace, as a likely contender for upside along with Axie Infinity. According to Dapp Radar, NFT sales rose to $2.47 billion in the first half of 2021 – a staggering 17,900% year-on-year growth from the first half 2020.

Nvidia confirms it accidentally unlocked RTX 3060 Ethereum mining

A software update released by Nvidia inadvertently bypassed the Ether (ETH) mining block the firm placed on its own GeForce RTX 3060 graphics card. A spokesperson for Nvidia confirmed on Tuesday that the latest 470.05 driver update was mistakenly released with code intended for use only by Nvidia developers, which allowed for the removal of the hash rate limiter. “A developer driver inadvertently included code used for internal development which removes the hash rate limiter on RTX 3060 in some configurations,” said an Nvidia spokesperson, as reported by The Verge. In February, Nvidia decided to intentionally hamper the Ether-mining effectiveness of its RTX 3060 series graphics cards to prevent a demand-induced shortage caused by crypto miners.

 

A three-way handshake between the hardware, the software and the computer firmware was supposed to ensure that the card recognized when it was being used to mine Ether and cut its computational power in half, from 50 megahertz per second to 25 MH/s. But the back door that allowed the card’s hash rate limiter to be bypassed came from the software side, and it was released by Nvidia itself. The offending beta update has since been pulled by the software company, but versions of it have already made it out onto the internet. Elsewhere on Tuesday, Andreas Schilling of tech website HardwareLuxx tested reports that custom edits to a computer’s BIOS were required to bypass the hash rate limiter. After testing driver 470.05 with a custom and standard BIOS, Schilling confirmed that no special modifications were required and that Nvidia’s driver removed the hash rate limiter itself. While the news only compounds the misery of gamers waiting to upgrade their graphics cards, the gaffe by Nvidia might not necessarily result in Ether miners eating up the next supply of GPU shipments. According to Hexus, the latest reports suggest that the affected driver can only unlock one RTX 3060 at a time, rendering it unsuitable for use in large mining-farms, for the time being at least. Initial rumors suggested a custom modification had bypassed the RTX 3060’s hash rate limiter last Wednesday, allowing it to mine Ether at full capacity. It was later revealed that the mod had not enabled the card to mine Ether specifically but had been rigged to enable the mining of another GPU-mineable cryptocurrency, Ravencoin (RVN).