Here’s the deal: It’s been a rough year for cryptocurrencies and their legions of fans. Bitcoin, by far the largest token, is down about 70% from its peak nearly a year ago. Ditto the second largest coin, ether, running on the ethereum blockchain.
But for months, the crypto faithful have been buzzing about a complex ethereum network software upgrade known as the “merger.”
In short, the merger will put ethereum’s core infrastructure on a more environmentally sustainable path, reducing its carbon footprint by 99%, according to the nonprofit behind the network. That’s the simple version anyway – actually pulling it off took years of research and testing, and it wasn’t clear what would happen because, like so much in crypto-land, nothing like it has ever been not done
Here’s what you need to know:
- When you hear critics slam crypto for sucking up as much energy as, say, all of Argentina, or compare bitcoin’s energy footprint to that of every refrigerator in America combined, they’re talking about the global community of computers needed to verify transactions under the “proof-of-work” protocol.
- Until now, both ethereum and bitcoin have operated on proof-of-work, which requires high-powered computers to verify transactions and “mine” new coins over a decentralized global computer network.
- (Ugh, I realize this might still sound like science fiction, but the longer explanation will seriously put everyone to sleep. Let me just boil it down to this: proof-of-work = bad for the environment and extremely bad for crypto industry PR).
- The long-awaited merger moves ethereum toward a more energy-efficient “proof-of-stake” mechanism for validating transactions.
What happens now?
Barring any problems with the merger, the ethereum network, which houses the entire community of NFTs (non-fungible tokens), should function just as before, but use radically less electricity and, supporters say, make the network more secure.
Will bitcoin follow suit?
It is not likely. Within the world of crypto, there are deep philosophical divisions over the usefulness of the underlying technology.
“Ethereum and bitcoin have completely different cultures, frankly,” said Laura Shin, host of the “Unchained” podcast. While it is technically possible for bitcoin to change its infrastructure, as ethereum just demonstrated, “bitcoiners see proof-of-work as an excellent way to secure the network.”
NUMBER OF THE DAY: 6%
Ah.
Borrowing costs have shot up in response to the Fed’s aggressive rate hikes, aimed at cooling inflation that has hovered stubbornly around 40-year highs for months.
This is a particularly painful time for prospective buyers as home prices remain high, inventory is low and the cost of daily living makes it difficult to save for a down payment.
STOP IT
The freight rail crisis is averted – at least for now.
Just to emphasize the seriousness of the potential strike, President Joe Biden personally called negotiators Wednesday night, according to a person familiar with the matter.
What happened?
Unions representing tens of thousands of conductors and engineers threatened to walk off the job at the end of this week if they couldn’t get a fairly basic work-life balance guarantee from their employers. The workers who run America’s freight trains were at their breaking point, often working 14 days in a row, with no sick days (paid or unpaid) and constant fear of termination if they missed work for medical reasons.
A strike would have been economically devastating, hurting consumers, businesses and farmers for America’s battered supply chains, potentially leading to shortages of gas, food and consumer goods, and forcing commuter rail to suspend service.
Here’s what we know about the deal so far:
- Union members get an immediate 14% raise, back pay and bonuses. In total, this amounts to an average of $11,000 per worker.
- The major bottlenecks around scheduling seem to have gone in the unions’ favor. Per Biden’s statement: “These rail workers will get better pay, improved working conditions and peace of mind about their health care costs — all hard-earned.”
- The tentative agreement would “exempt time off for certain medical events from carrier attendance policies,” two of the unions said in a joint statement.
- Workers will be able to take time off for medical care for the first time ever, according to the unions.
- But medical time off will not be paid. And it’s only two days a year. After that allotment is used up, taking leave will result in penalties under a points-based system that could ultimately lead to termination.
Don’t rule out a strike just yet…
The agreement has yet to be ratified by ordinary union members, many of whom balked at the idea of concessions. The unions agreed not to strike while votes are counted, meaning the negotiators bought themselves a few weeks.
A unit of the 5,000-member Machinists union has already voted to reject Thursday’s deal, but it will try to seek a new deal by the end of the month.
A year ago, about 10,000 workers at John Deere went on strike after rejecting a lucrative preliminary agreement. Similarly, workers at Kellogg continued to strike in December after negotiators thought they had reached a settlement.
