Grayscale believes Ethereum PoW (ETHW) will not be successful

The proposed hard fork for the second largest cryptocurrency is not very popular.

Ethereum is closer and closer to The Merge update, in which it will change its consensus mechanism to Proof of Stake (PoS), which is to reduce the energy consumption of this project by an impressive 99.95%! The community around this famous cryptocurrency project is very broad, which means that not everyone is in favor of abandoning Proof of Work (PoW). There is a group of ETH miners who do not like this idea. So this month they proposed to create a new alternative in the form of a hard fork. According to analysts at Grayscale, Ethereum PoW (ETHW) has little chance of success.

Is Ethereum PoW (ETHW) doomed to fail?

The cryptocurrency community has always been characterized by a lack of homogeneity and divisions. Lack of agreement as to the key elements concerning a given project led to 'forks' in networks. This time, the proposal to carry out a new hard fork came from a group of Ethereum miners, who are not thrilled that they will not be able to mine Ethers anymore.

As part of The Merge, the second largest virtual currency will move to PoS. This means that it will not be able to be mined any further. From now on, validators will deal with securing the network. This is a problem for current miners, because they mine ETH with dedicated GPUs, which are usually heavily invested. They cannot use the same equipment, for example to switch to Bitcoin (BTC) mining.

One of the available alternatives is migrating to Ethereum Classic (ETC). This is the former Ethereum network, where the famous split into two camps took place after a hacker managed to steal 3.6 million ETH from the decentralized autonomous organization The DAO in 2016 as part of a vulnerability.

Those who remain supporters of the current Ether, but are opposed to its switch to PoS, have proposed to create a new Ethereum PoW (ETHW) hard fork. Personalities who endorsed the concept included renowned ETH miner Chandler Guo as well as TRON project CEO Justin Sun.

According to some industry experts, ETHW may have temporary speculative interest, but it will never be able to surpass ETH. Analysts from the well-known investment company Grayscale - a leader in investing in digital currencies - recently told about the fact that the newly created virtual currency will not be successful. In their opinion, there may be attempts at mass liquidation. Among the black scenarios, they mentioned a situation in which Ether holders would rush to sell the newly received free ETHW tokens. In their opinion, the result will be "proportional pressure to sell".

The new hard fork was also not supported by the main developer of Ethereum, i.e. Vitalik Buterin. He stressed that after the successful implementation of The Merge, his team would not bother to solve any technical problems of ETHW.

The price of PoW Ethereum is falling

The proposed virtual currency has already been placed on several well-known trading platforms. Since then, its value has dropped by over 60%. Moreover, ETHW is clearly losing out to ETH.

In Grayscale's opinion, the new alternative does not pose a threat to Ethereum Classic as well. They stated that regardless of how the situation with the hard fork proposed by the miners develops, it will not significantly affect this cryptocurrency.

The ETHW is currently trading around $ 50.35 per coin. In the last 24 hours, the transaction volume in this virtual currency has decreased by more than 70%.