Here’s the deal: It’s been a rough year for cryptocurrencies and their legions of fans. Bitcoin, the largest token by far, is down roughly 70% from its high nearly a year ago. So is the second largest coin running on the Ethereum blockchain.
But for months, crypto-believers have been grappling with a complex software upgrade to the ethereum network known as a “merge.”
In short, the merger would put ethereum’s core infrastructure on a more environmentally sustainable path, reducing its carbon footprint by 99%, according to the nonprofit behind the network. It’s a simple version, but pulling it off took years of research and testing, and it wasn’t clear what would happen because, like in crypto-land, it had never been done before.
Here’s what you need to know:
- When critics slam crypto for absorbing as much energy as the whole of Argentina, say, or comparing bitcoin’s energy footprint to that of all America’s refrigerators, they are talking about the global community of computers needed to verify transactions using the “proof of work” protocol.
- Until now, both ethereum and bitcoin were running on proof-of-concept, which requires high-powered computers to verify transactions and “mine” new coins on a decentralized global computer network.
- (Ugh, I realize it still sounds like science fiction, but a longer explanation would put everyone to sleep. I sum it up like this: proof of work = bad for the environment and very bad for the crypto industry. PR).
- The long-awaited merger moves ethereum to a more energy-efficient “stake” mechanism for validating transactions.
What happens now?
Barring problems with the merger, the ethereum network, which includes the entire NFT (non-fungible token) community, should function as before, but using much less electricity and, supporters say, making the network more secure.
Will Bitcoin follow suit?
Not likely. In the world of cryptography, there are deep philosophical rifts over the utility of the underlying technology.
“Ethereum and bitcoin have quite different cultures, frankly,” says Laura Shine, host of the “Unchained” podcast. Although it is technically possible for Bitcoin to change its infrastructure, as ethereum recently demonstrated, “bitcoiners see it as a great way to secure the proof-of-work network.”
DAILY AMOUNT: 6%
Borrowing costs have risen in response to aggressive interest rate hikes by the Fed, aimed at cooling inflation that has hovered around 40-year highs for months.
It’s a particularly painful time for potential buyers, as home prices remain high, inventory is low, and everyday living costs make it difficult to save for a down payment.
A freight rail crisis has been averted, at least for now.
To underscore the seriousness of the potential strike, President Joe Biden called negotiators Wednesday night, according to a person familiar with the matter.
Unions representing tens of thousands of managers and engineers threatened to walk off the job at the end of this week if they could not get a guarantee of work-life balance from their employers. The workers who operate America’s freight trains were at breaking point, often working 14 days straight, without sick leave (paid or unpaid) and without the constant fear of being fired if they lost their jobs for medical reasons.
A strike would be economically devastating, harming consumers, businesses and farmers to America’s damaged supply chains, causing shortages of gas, food and consumer goods and forcing the suspension of commuter trains.
Here’s what we know so far about the deal:
- Unions get 14% raise, back pay and bonuses immediately. In total, it costs an average of $11,000 per employee.
- The main objections to the program appeared in favor of the unions. Per Biden’s statement: “These railroad workers will receive better pay, better working conditions, and peace of mind about health care costs, all hard-earned.”
- The tentative agreement “will exempt time off for certain medical events from the carriers’ attendance policies,” the two unions said in a joint statement.
- Workers will, for the first time, be able to take time off for health care, according to unions.
- But the medical leave will not be paid. And it’s only two days a year. After this allotment is exhausted, taking time off will result in penalties based on a points-based system, which may ultimately lead to termination.
Don’t rule out a strike just yet…
The deal still needs to be ratified by union members, many of whom have balked at the idea of concessions. The unions have agreed not to strike while the votes are being counted, which has bought the negotiators a couple of weeks.
A unit of the already 5,000-member Machinists union voted to reject Thursday’s deal, although it will try to find a new deal by the end of the month.
A year ago, about 10,000 John Deere workers went on strike after a favorable interim agreement was rejected. Similarly, Kellogg workers continued to strike in December after negotiators thought they had reached an agreement.