This week ends with a new era in blockchain that can make or break crypto’s progress. It’s no longer news that Bitcoin has moved up, but Ether is also rallying on charts everywhere.
Ether’s next price point is $4,000, and the financial market seems willing to make the leap.
On March 13, 2024, the Ethereum blockchain was upgraded with sharding technology, growing the hopes of lowering the fees of using Ether. This is an upgrade that everyone is talking about, and the features it will set only establish the stage for crypto’s growth.
Ether’s Consensus and Execution Layers Now Come to Focus
There’s a unique challenge in the hands of the world’s leading smart-contract network. The Ethereum platform is functional and rational, but it wasn’t initially designed to accommodate the amount of data that it processes at the rate people need it today. Due to rising demand in using Ethereum, the result is a congested network that forces users to pay higher fees.
Some developers have responded to this congestion by offering sharding technology, helping with Ether’s congestion. Zilliqa, NEAR and Polkadot are examples of sharding blockchains.
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As of today, the Ethereum network has now been promoted into its own sharding technology.
The Ethereum Improvement Proposal— “EIP-4844”
The sharding technology shaking the crypto market is none other than two upgrades that are each called the Cancun and the Deneb. When referred to as a single upgrade, being that they were activated simultaneously, developers refer to them as Dencun.
Being years in the making, what’s now called proto-danksharding is giving Ether a new face.
What Is Sharding and How Does It Work?
Danksharding or “sharding” is the process of breaking up databases and making them smaller, easier to process, transport or handle. The shards are mini blockchains that can operate as autonomous processes to relieve a central blockchain of its load.
In some configurations, thousands of shards get created, and can each handle their own load of data.
The Rising Cost of Layer-2 Networks On Ethereum
Talk about great news, developers have successfully reported that network fees have already lowered. The “blobs,” which shards are also being called, were successfully placed as a new transaction alternative for the layer-2 network of Ethereum.
Numerous reports are out there, but some have tracked the new fees to as low as $.0005 cents per transaction. This was a drop from an initial price of $.31. Others have reported shifts from an $.88 fee down to as low as $.18. Keep in mind that the fees are automatically calculated, and Ethereum users were shocked to find that transactions now cost less.
As Bitcoin Is Now Set to Half …
Notice that Ethereum is catching all eyes in the market right before Bitcoin will undergo another halving. Just don’t get the wrong idea about what it means when Bitcoin halves. To ensure a controlled release of BTC coins, miners can only mine a total of 21 million BTC. Not only this, but the reward they get eventually reduces and gets smaller over time.
With halfing, scarcity is likely to increase Bitcoin’s price and influence Ether also.
April will start the next halving and will reduce the amount mined to 3.125 BTC respectively.
Since Bitcoin was first started, it has had three halvings on the following dates:
- Nov. 28, 2012
- July 9, 2016
- May 11, 2020
In the days ahead, expect tremendous volatility. Not only is “Dencun” live in the crypto market, but with BTC ready to half again, the approval of ETFs for Ether might go live by May.
You can find more about buying Ether through Binance and this review.
