Ethereum [ETH] has stolen the limelight from Bitcoin [BTC] yet again. As the market started a relief rally, the largest altcoin went on a major recovery mode as it soared by more than 10% over the last 24-hours.
The investor interest in Ethereum has seen a first major uptick in mid-April, which was induced by an appreciation in the volume of the spot market as well as a growth in the open interest in the futures space. Since then the volume has maintained an upward trajectory.
However, the figures recently exploding and even exceeded that of Bitcoin volumes for the past month and hit an all-time high above $20 billion. This was observed by the Senior Research Analyst at Messari Ryan Watkins.
Ethereum, not Bitcoin
The cryptocurrency market was jolted after Musk’s back-to-back tweets. The regulatory clampdowns from China only added to its woes. The Tesla chief might have been at the receiving end of severe backlash following his comments on the environmental impacts of Bitcoin mining, but it has, once again, sparked off a crucial discussion – Where is the industry headed? To proof-of-work [PoW] or proof-of-stake [PoS]?
Unlike energy-intensive PoW, participation in the blockchain verification process in PoS requires users to run a node and lock in a certain amount of crypto. This process is called staking which does not require the consumption of an increasing amount of energy like proof-of-work.
Here, the validators do not compete to create blocks or mine digital coins but are selected randomly by an algorithm in place. These entities must bet their entire stake to prove trustworthiness. This mechanism is designed in a way that the validators would end up losing everything if they conspire.
Despite Bitcoin being the leader of the market, in general, there are many digital assets that are based on the PoS model. That is the direction that a lot of crypto projects are headed in. The transition of Ethereum from PoW to PoS could be another reason for the rising investors’ favor.