On September 15, 2022, The Merge, a much-anticipated update to the Ethereum network, happened. The transition from a proof of work (PoW) consensus to a proof of stake (PoS) consensus was avidly anticipated by cryptocurrency enthusiasts. So, why did Ethereum fork occur? Let's see.
Why Did Ethereum Fork Occur?
Whenever there are sizable community differences regarding the direction of a cryptocurrency initiative, forks typically take place. Forks have occasionally been employed as a strategy to draw financing for new initiatives.
A hard or soft branch may be started by community members who are unhappy with the project's current state or a recent change.
A hard fork invalidates previously valid blocks or revalidates faulty blocks, representing a fundamental change from the current network protocol. The network splits in two as a consequence, and all nodes and users who want to follow the new route must update to the most recent protocol version.
A hard fork gave rise to some well-known cryptocurrency initiatives, including Ethereum Classic (ETC), Terra Classic (LUNC), Bitcoin Cash (BCH), and Bitcoin SV (BSV). The group of initiatives that broke away from their initial blockchain networks now include EthereumPoW (ETHW).
Dedicated GPUs (or graphics processing units), which are computer chips well-suited for managing the demanding computational requirements of crypto mining, are essential to the $19 billion Ethereum mining market. Since Bitcoin employs ASICs for mining, these chips are-useless (application specific integrated circuits).
The ETHW Core has not been placed by Vitalik Buterin, the creator of Ethereum, who suggested that ETH miners move to mining Ethereum Classic (ETC), which he called a "fine" substitute.
The new face of the EthereumPoW fork, Chandler Guo, differs with Buterin. He contends that ETC was insufficient and lacked an ecology. Guo claimed that because some ETH miners believed The Merge was forcing them, a hard split was about to occur.
The ETHW Core can alter the network as they see fit by forking the blockchain on their own, including by attempting to transfer coins on the brand-new PoW blockchain.
Is ETHW A Good Investment?
After the fork went live, ETHW dropped by more than 80% in a week, trading at $8.
Despite ETHW Core's assurances and Mr. Guo's bravado, the new EthereumPoW didn't exactly launch as easily as anticipated. In actuality, the Ethereum Merge before it did much better.
The hard fork was plagued by technological difficulties from the beginning. An improper third-party contract left the network vulnerable to a malicious attack, costing 200 ETHW (or about $1,600).
Many users also expressed frustration over their inability to access the EthereumPoW servers using the data given by the blockchain.
As if that weren't enough, Justin Sun, a Poloniex supporter and one of the project's early advocates, made a U-turn and decided to support an unheard-of new Ethereum fork.
Summary
Why did Ethereum fork occur? Hard splits are frequently the result of conflicts, which makes them controversial to some extent. The main benefits of EthereumPoW appear to be ETH miners, who risk going insolvent if Ethereum switches to the more environmentally friendly.
