© Reuters
Investing.com – JPMorgan (NYSE:) has raised some blockchain concerns following the network’s transition to a proof-of-stake (PoS) consensus mechanism following the “Merge”.
This change caused the blockchain to be split in two, one based on Proof-of-Work and the second on Proof-of-Stake.
Some exchanges and platforms have shown support for the initial version, which still uses proof-of-work (PoW) verification, and at least 19 former ether mining pools are active on it, JPMorgan said. Thus, the existence of two versions could divide the Ethereum community.
A second concern is that the blockchain has become less decentralized, the bank said, “because only a few entities control the majority share of the ETH staked.”
JPMorgan noted that the price of ether (ETH) has fallen sharply. This decline was likely caused by a combination of “rumor buying and news selling flows specific to the Ethereum merger event,” as well as widespread weakness in risk assets due to the more aggressive attitude of central banks.
The merger is the first of five planned updates for the blockchain.
Meanwhile, a shift to “backwardation” in the futures market is a “manifestation of the move towards more bearish sentiment in crypto markets in recent weeks,” the bank said. Backwardation occurs when the spot price of an asset is higher than its futures price.
In terms of mining, ETC token was the main beneficiary of the merger. The network’s hash rate doubled, and tokens from other PoW-enabled blockchains, like and , also saw big increases.