Selected articles of the week:
As Ethereum’s move to a Proof of Stake consensus algorithm nears, misunderstandings about the highly anticipated “merge” are mounting. A widely held belief is that the switch will change the often crippling transaction fees that are incurred when the network is heavily used. In reality, the merge has no direct impact on the throughput of the blockchain. Only the splitting of the chain into various parts (sharding) will reduce the transaction fees on the base layer. A closer look at Ethereum’s scaling plans.
Stablecoins have become a central blockchain application case. The tokens, which are mostly tied to the U.S. dollar, enable easy payments on a neutral infrastructure that knows no national borders or intermediaries. Thanks to these properties, stablecoins are increasingly being used as an international means of payment. The Russian Ministry of Finance also wants to benefit from the advantages of the technology with a planned gold-stablecoin.
In developed nations with accessible and solid financial systems, cryptocurrencies are often perceived as purely speculative tools. However, a look at poorer regions of the world reveals the actual potential of the technology. A large portion of the world’s population still does not have access to the banking system. Furthermore, many residents of developing countries are experiencing a sharp decline in the purchasing power of their domestic currency. So it’s no surprise that crypto adoption is growing exponentially in Africa, with Nigeria leading the way as the continent’s largest economy.
Global inflation rates surged again in August, forcing both the European Central Bank and other central banks to raise interest rates for the first time in over a decade of falling rates. In the same vein, Federal Reserve Chairman Jerome Powell expressed the intention to use any tools to curb inflation. This difficult environment also weighed on the prices of digital assets last month. A closer look at fundamental developments and prospects in the field.
In addition: The parent company of ETP issuer 21Shares was crowned the highest-rated Crypto Valley startup this week. A funding round led by London hedge fund Marshall Wace propelled 21.co to a valuation of $2 billion. This can be read as a growing interest in the new asset class from the traditional financial world.