Ethereum, the second largest cryptocurrency after bitcoin, has skyrocketed over the past year and has risen alongside the rising price of bitcoin.
The price of bitcoin has eclipsed the highs of late 2017 at around $ 20,000 per bitcoin, to nearly $ 60,000 in recent weeks, while the price of the ether ether token has also been forged in a new territory, 30% more than its peak in early 2018.
Now, a proposed upgrade to the ethereum blockchain that will destroy (or “burn”) ether chips could mean ethereum becomes more “solid” than bitcoin, according to ethereum co-founder Vitalik Buterin.
The price of Bitcoin and Ethereum have risen in recent months, to all-time highs … [+]
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The Ethereum update, known as EIP-1559 and part of a broader step toward ethereum 2.0, will review the current network transaction fee system, and users will send a fee to the network itself. instead of the so-called miners who maintain the network. These rates will burn, reducing the global supply of ether, which is a controversial issue for the cryptocurrency community.
“If Bitcoin and its fixed supply are solid money, then if you have a decreasing supply, this will do [ethereum] money for ultrasound, “Buterin asked, speaking in a recent episode of the Tim Ferriss Show podcast alongside technology investor Naval Ravikant.” Solid Money ”refers to the stability and usefulness of a currency as a security deposit.
Although Buterin called the issue a “joke,” he went on to explain that there is a clear possibility that the radical update to the ethereum network, approved by developers last week and expected to be rolled out in July, could reduce the supply of ethereum.
“If the demands for using ethereum are high enough, there really would be more [ether] be destroyed from what is being created, “Buterin said.” Actually, it’s not even such a crazy possibility. If you look at last month’s transaction fees, they’ve actually been a lot higher than today’s blockchain rewards. “
The recent rise in extreme ether prices, which has increased by 400% since the broader bitcoin and cryptocurrency market kicked off in October, comes amid rising interest rates. by decentralized finance (DeFi), which use cryptocurrency technology to recreate traditional financial instruments such as loans and interest.
With many of the larger DeFi projects built on top of the ethereum blockchain, the testimonial has skyrocketed as users flood the network. Meanwhile, the latest fad of cryptocurrencies for so-called non-fungible tokens (NFTs) has also caused intense traffic on the underlying ether network.
When Ravikant warned that these applications being built on ethereum could be the victims of “hackers … breaks and failures,” Buterin called the controversial cryptocurrency tether, which is individually linked to the U.S. dollar. like a “time bomb” [demon]”for bitcoin: highlighting the long-standing competition between the two largest blockchain ecosystems.
Ethereum’s latest price rally has seen its price soar well above the highs of early 2018, with … [+]
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While most miners seem to be joining the planned update to ethereum, some – including the leading ethereum mining group SparkPool – have recorded their opposition.
“I am concerned about a possible rebellion by the miners, which could weaken the credibility of the etereum network,” says Richard Johnson, chief executive of Texture Capital, speaking via email. Johnson added that he is “skeptical” whether the upgrade will have a “significant” impact on ether rates that have multiplied tenfold in the last twelve months.
Amid the rush to ethereum, several rivals of ethereum have emerged in recent months, claiming to offer similar decentralized platforms with faster transaction times and lower rates and looking to take advantage of ethereum’s problems.
“In today’s cryptography, Ethereum seems to be a victim of its own success,” Antoni Trenchev, managing partner of digital asset manager Nexo, said in comments sent via email. “The huge influx of users, developers, decentralized applications, DeFi protocols, along with the growing NFT craze that are assaulting the blockchain, make it very congested.”
However, Trenchev added that he hopes to “take a look at this real bull run soon enough after the launch of EIP-1559, with the hammer of real oxen that will fall with ethereum 2.0”.