One of the world’s largest financial institutions Morgan Stanleyin a new report he prepared, discussed the long-awaited consolidation issue in the Ethereum (ETH) ecosystem.
‘The Merge’, which will represent the transition of the Ethereum blockchain to a ‘proof of stake’ model, calculates to eliminate the need for mining activities. According to the report, with this transition, the need for graphics processing units (GPUs) and energy will also decrease.
According to Morgan Stanley, cryptocurrency mining has significantly impacted the gaming graphics industry in the last 18 months, accounting for 14% of expected revenue in 2021, while also contributing significantly to a severe graphics shortage that has increased the overall mix and cost.
Although demand for GPUs is on the decline, according to media reports, Nvidia may be less vulnerable to the need for cryptocurrency mining than it was in 2017-19. Additionally, an assessment that the demand for graphics cards from crypto mining began to decline in the first half of the year was also included in the report.
Nvidia and AMD fronts cryptocurrency continues to claim that they reduce the likelihood of adverse scenarios related to the unit. Still, Morgan Stanley believes gaming GPU prices will drop in the first quarter of next year. This includes weak demand due to a decline in work from home, Ethereum Several variables will result, such as difficult sequential computations following the blockchain’s transition to proof-of-stake (PoS) and the rebuilding of channel inventories in 2022.
Koinfinans.com As we have previously reported, mining revenues reached the lowest level of the last year in 2022. After these developments, many miners started to sell their equipment on the second hand market. This further reduced the price of graphics cards.
No Benefit from Merging Ethereum?
According to Morgan Stanley, the merger could be completed as early as September or August. However, given the previous delays, it wouldn’t be surprising to see a delay again.
The research also claimed that the transition to Ethereum proof-of-stake will not solve Ethereum scalability issues, including weak transaction volume or transaction costs. According to the report of Morgan Stanley; The merger will bring no additional benefits other than a reduction in energy use.
Additionally, a recent report by the Bank for International Settlements (BIS) talked about how Ethereum miners manipulate the order of transactions to maximize profits. The application is also called “miner extractable value” or MEV. According to the report, Ethereum’s transition to PoS will not change this practice.
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Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.