The new forked version of the Ethereum ETHW has seen all-time highs and lows both in the span of a single month.

Although certain exchanges and programmes have supported the split version of Ethereum (ETHW), miners have found it challenging because of the low price. In the past seven days, ETHW plummeted by around 83% and ETH fell by about 24%.

The value of Ethereum (ETH 2.0) was declining despite the much-discussed "Merge" software update that was released a few weeks ago and prompted hopes for a price increase. After the merge, the Ethereum fork split into two versions: ETH, which uses the more recent proof-of-stake consensus algorithm, and ETHW, which uses the more antiquated proof-of-work algorithm.

After the announcement of update: “The Merge”, the transition has gradually phased out miners and replaced them with validators while transitioning the Ethereum network from its current proof-of-work (PoW) mining paradigm to a proof-of-stake (PoS) consensus mechanism.

We have been hitting a lot on the transition in the mechanisms of the Ethereum Blockchain network thus, before moving ahead with the topic, let us have a brief look at both these mechanisms.

Proof of Work Mechanisms in Ethereum:

The Ethereum network started working with the Proof of Work mechanism. This is the mechanism which once allowed all the nodes of the Ethereum Network to come to a common agreement on things like account balance and transactions. The proof of work mechanism made the Ethereum network very difficult to attack or manipulate and this mechanism also saved the Ethereum investor from double-spending their coins.

The proof of work mechanism is not only responsible for bringing the Ethereum Network to an agreement but, it is also the main algorithm that is responsible for underlying the rules which all the miners would need to follow while working on the proof of work blockchains.

Proof of Stake Mechanism in Ethereum:

The Ethereum network has switched off its Proof of Work mechanism and has switched to the Proof of Stake mechanism in 2022. This was done because the proof of stake mechanism is secure, uses less energy, and is better for implementing new solutions related to scaling a blockchain network.

Ethereum uses proof-of-stake, in which validators voluntarily stake money in the form of ETH into an Ethereum-based smart contract. In the case that the validator acts dishonestly or carelessly, this staked ETH serves as collateral that may be lost. The validator is therefore in charge of ensuring that newly created blocks are validly propagated throughout the network as well as occasionally producing and propagating new blocks.

What is EthereumPoW (ETHW) and Why was it Created?

A hard fork of the Ethereum network created the EthereumPoW (EthW) network. To put it simply, a fork fundamentally alters how the blockchain network operates. Because a small but vocal segment of the crypto community insists that the network should continue to use the proof-of-work consensus mechanism, hence EthereumPoW was established. Among this community, many of them were miners who could not hold onto their revenue streams when the mechanism of Ethereum changed from the proof of work to the proof of stake.

A cryptocurrency miner named Chandler Guo claimed that 90% of Ethereum miners would soon go out of business since Ethereum no longer requires expensive graphics cards and other technology to mint new tokens. This was said in an interview with Coindesk on September 16. The concern pointed out was that post transition, with the proof of stake mechanism, users won't need high-specification laptops or setups to start mining.

ETHW is the native coin for the EthereumPoW network being offered on exchanges like FTX, ByBit, and BitMart, where individuals may trade this new token.

In an update that was made available alongside the main net launch, the EthereumPoW team informed readers of several adjustments and corrections. Over 1.7 billion transactions have been made since its inception. At this time, more than 254 million addresses are holding ETHW.

Many exchanges also clarified that if successfully implemented, eligible users will be credited ETHW at a ratio of 1 is to 1 (1:1)  in their Spot wallets.

Variable Prices of ETHW:

The token reached an all-time high of $141 on August 8, 2022 before plummeting once again to an all-time low of $26 on September 13. The token reached slightly over $36 when ETHPoW announced the launch of its main net on the same day. At the time of writing, the price of ETHW lies at an astonishingly low price of $5.74!

Conclusion:

This fork in the Ethereum blockchain network has divided the community into two groups. One, where the majority are on the side of the Merge and the other community who are in support of ETHW as they are not happy with the transition and think that the MERGE will play a major role in the decline of Ethereum Blockchain Network.

However it is crucial to note that ETHPoW token has nothing to do with the original Ethereum, Vitalik Buterin and his team.

According to a digital media publication outlet Tom's Hardware the Proof of Work token miners “won't be lucrative" unless they are using graphics cards like the Nvidia GeForce RTX 3090, AMD Radeon RX 6800 or 6800 XT, with an electricity cost of roughly $0.1 per kilowatt-hour. After deducting the cost of energy, this graphics card setup will produce roughly $0.06 per day which won’t mean anything for the efforts made throughout the day.