Overnight, the world’s second-largest cryptocurrency — Ethereum [ETH] — pushed its most significant update to date…
‘The Merge’, as it has come to be known, is easily one of the most ambitious changes we’ve seen from any crypto project. It will move Ethereum from a Proof-of-Work system to a new Proof-of-Stake protocol.
As a result, the big change will be Ethereum’s overall dependence on energy. According to the people behind the update, it is expected to cut the overall energy use of the network by 99.95%!
That should certainly help in silencing the critics who argue that cryptocurrency is an ecological disaster. Because while Bitcoin [BTC] may still rely on Proof of Work, this new change may pave the way for Ethereum to dethrone it.
After all, beyond energy usage, this change is about making the network more efficient too.
Ethereum promises more transactions at a faster rate than ever, thanks to The Merge. The kind of change that may finally pave the way for widespread adoption of the multitude of DeFi apps that rely on the network to run.
At least, that’s the hope…
Norway pushes ahead with CBDC testing
One particularly interesting consequence of The Merge may be in its potential for central bankers.
Central bank digital currencies or CBDCs will almost certainly explore Ethereum’s new network for digital money projects. In fact, Norway is already doing exactly that.
The Scandinavian nation has been designing and testing a digital krone for a while now. As a result, they’ve got an early working prototype that people can play around with right now.
If you’re at all curious, you can check it out for yourself here.
Just be aware that it is still very technical and not very user-friendly at this early stage. This is because the Norges Bank is naturally trying to lay the foundation for its CBDC before making it more accessible for everyday people.
But it is certainly fascinating to see how far this project will go.
On the other hand, it is also somewhat concerning.
It is becoming increasingly clear that the future of CBDCs is coming, whether we like it or not. And while it is great to see nations embracing this new technology, I can’t help but worry that it will inevitably be abused.
After all, the whole point of crypto ventures like Ethereum is to decentralise money.
A CBDC controlled only by central banks would do the opposite. It will only lead to more centralisation of monetary power, not less.
So the real question is, what future is in store for money?
Sinister intentions
The concern, of course, is that pet projects, like this CBDC by Norge Bank, could lead to disastrous outcomes for everyday people like you and me.
I don’t doubt that cryptocurrencies and digital money are where the future is headed, but if they don’t remain decentralised, it will become worrisome. As long-time financial maverick Jim Rickards will tell you, these CBDCs could be a tool for nefarious activity:
‘China is already using its CBDC to deny travel and educational opportunities to political dissidents.
‘Canada seized the bank accounts and crypto accounts of non-violent trucker protestors last winter.
‘These kinds of “social credit scores” and political suppression will be even easier to conduct when CBDCs are completely rolled out.’
I’m sure some people will be content with giving central banks the benefit of the doubt, at least for now. But my fear, and I suspect Jim’s as well, is that once that power is given, there is no taking it back.
You can’t just hand the reins over to central bankers and expect them to give it up easily if things go wrong, which is precisely why CBDCs are a precarious technology.
For more grizzly details on how this Orwellian future may be coming sooner than you think, check out our latest deep dive on the matter. In a special video presentation, we explain exactly why investors need to be wary of this looming threat.
Check it out for yourself, for free, right here.
Personally, my hope is that we will see more open and transparent crypto projects rise to the occasion. Because as the technology spreads further across the globe, thanks to milestones like ‘The Merge’, we’re going to need to appreciate the real innovators.
The future of money should empower everyone. Not just the same old elites that it has for centuries…
Regards,
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Ryan Clarkson-Ledward,
Editor, Money Morning
Ryan is also co-editor of Exponential Stock Investor, a stock tipping newsletter that hunts down promising small-cap stocks. For information on how to subscribe and see what Ryan’s telling subscribers right now, click here.
