Grayscale Comes to Its Senses And Delays ETHPoW Support
Grayscale, the world’s leading digital asset manager, has decided to extend its review of the former Proof-of-Work (PoW) system tokens. That is despite initially planning to sell ETHPoW after Ethereum’s upgrade in September 2022.
Ethereum’s move from PoW to Proof-of-Stake (PoS) consensus mechanism was necessary. It is energy-efficient and more secure, enabling the deployment of new scaling solutions.
The review extension is expected to last 180 days, during which Grayscale will determine the possibility of selling the asset ETHPoW after the Merge. The company is motivated to conduct this review due to environmental concerns surrounding PoW, which requires high energy consumption levels to validate transactions.
Moreover, the firm is also worried about the uncertainty of trading venues and crypto asset custodians. EthereumPoW tokens do not have established trading venues yet. That sends a clear signal to the whole industry. No one wants to get involved with a project that has no future.
Based on Grayscale’s announcement, the price of ETHPoW may fluctuate if crypto asset custodians support the tokens. It wouldn’t be in their best interest to support a dying asset.
The review is an essential step for Grayscale to adopt PoS. After all, the asset manager holds a significant amount of Ethereum in its Grayscale Ethereum Trust. In addition, other significant institutions may also reconsider their stance on the PoW system.
However, some community members prefer the mining system of the PoW model. That lead to the forking of the network into two blockchains – EthereumPoW and the primary Proof-of-Stake network.
Although ETHW benefits those who prefer mining through the system, it is challenging for digital asset companies that offer exposure to only Ethereum. Some investors might desire exposure to ETHPoW. Common sense can be hard to come by when money is on the line.
Meanwhile, some companies plan to provide a new Exchange-Traded Product (ETP) to facilitate investors’ exposure to ETHPoW. Still, given its sustainability uncertainty, the new ETP will serve as a backbone for ETHW.
Grayscale’s review extension is considered a positive step for Ethereum and the cryptocurrency industry as a whole.
The adoption of this consensus mechanism by significant institutions such as Grayscale will likely increase over time.
The post Grayscale Comes to Its Senses And Delays ETHPoW Support appeared first on CryptoMode.