• Grayscale, the world’s largest digital asset manager, is extending its review on the former PoW system tokens.
• The move was necessary as the PoS consensus protocol is not energy-intensive but more secure and valuable for deploying new scaling solutions.
• The Ethereum network completed its Merge in September 2022, a significant upgrade to operate on a PoS consensus algorithm with notable differences from the former PoW.
Grayscale Extends ETHPoW Review
Grayscale, the world’s largest digital asset manager, announced that it will extend its review of the former Proof-of-Work system tokens for 180 days. This will give them ample time to decide the manner, time period and possibility of selling ETHPoW – an asset after the network’s Merge in September 2022.
Motivation Behind Review Extension
The company cited environmental concerns surrounding PoW – high energy consumption levels to validate transactions – as one of their primary motivators for this extension. Additionally, they are concerned about the uncertainty of trading venues and crypto asset custodians; as trading venues are still not established for EthereumPoW tokens.
Potential Impact On Price
The price of ETHPoW may fluctuate if there is any development in trading markets or if crypto asset custodians support these tokens. Grayscale’s review is important since they hold a significant amount of Ethereum in their Grayscale Ethereum Trust; thus other major institutions may reconsider their stance on proof-of-work systems after this review has been conducted.
Ethereum Merges Into A New Blockchain
In September 2022, the Ethereum blockchain network moved from its former Proof-of-Work system to a current Proof-of-Stake consensus mechanism due to environmental concerns and scalability issues associated with mining operations. This type of consensus protocol requires less energy but offers increased security and value deployment capabilities to users.
By extending its review on ETHPoW tokens, Grayscale provides ample time for them to decide upon further action while taking into account potential consequences such as price volatility and uncertain trading venues/custodianships that come with it. Ultimately, this could be a step towards wider adoption of proof-of stake systems by other major institutions within cryptocurrency space