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Ether Surges To All-Time High On Enthusiasm Over Ethereum 2.0

Ether reached its all-time high as crypto surged on new developments in the DeFi space.

The second-largest crypto has reached an all-time high of over $4,700.

Other major cryptocurrencies were up as well. Bitcoin was up 8% over the last week to $66,000. Many investors believe it will soon reach its all-time high of $67,000.

Binance Coin surged almost 20% to $649, and Solana was up 23% to $250 over the last week.

Ether was up just under 11% in the last seven days.

DeFi and Ethereum

The recent surge is likely a result of the interest in decentralized finance (DeFi) and other functionality the network offers.

Ether powers the Ethereum network, a decentralized blockchain network with smart contract functionality.

Supporters claim that the network could be the backbone of the future financial system.

The decentralized network allows users to create apps that can execute smart contracts. These apps work under a set of rules, which eliminates the need for any third party to enforce the contracts. Furthermore, users can interact with these apps at will.

Due to its functionality, Ether is the second-largest crypto by market cap, trailing only behind Bitcoin.

This functionality will become even more attractive once Ethereum 2.0 comes online.

Ethereum 2.0 Upgrade

Recently, the network came one step closer in that direction.

Altair Beacon Chain upgrade went live in October. Developers claim it will bring the network one step closer to Ethereum 2.0.

The upgrade is the likely candidate for the recent surge in Ether. As Ethereum 2.0 is nearing completion, Ether will become more and more attractive to investors. That is, if the developers deliver on their promises.

Why Ethereum 2.0?

Initially, developers scheduled the long-anticipated upgrade for the DeFi network for December 2019.

Despite delays, Ethereum 2.0 is progressing steadily. The upgrade is coming in three major phases. The first phase, dubbed Phase 0 or Beacon Chain, went online in 2020.

Beacon Chain is a new proof of stake (PoS) blockchain, the foundation of Ethereum. It will enable proof-of-stake operations once the entire upgrade is complete.

Ethereum works on a proof of work (PoW) model, which makes “miners” solve complex equations to validate transactions. These equations require a lot of energy, which means that transactions are expensive.

Proof of work also draws criticism on grounds of its impact on the environment. 

On the other hand, the proof-of-stake model would allow users to validate their transactions with the coins they own. Significantly, the new blockchain model would reduce the network’s environmental impact by 99%.

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Phase 1, or Shard Chains, will be coming in 2022. Finally, the entire Ethereum 2.0 network should also be live in the first half of 2022.

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