Ethereum, the second largest cryptocurrency after bitcoin, has risen in the last year, rising along with the rise in the price of bitcoin.
The price of bitcoin has eclipsed its highs since the end of 2017 of about $ 20,000 on bitcoin, screaming at almost $ 60,000 in recent weeks, while the price of the etheric symbol of ether has also been forged in fresh territory – up 30% from the peak from the beginning of 2018
Now, a proposed update to the ethereum blockchain that will destroy (or “burn”) ether chips could mean that ethereum becomes more “sound” than bitcoin, according to ethereum co-founder Vitalik Buterin.
The price of Bitcoin and Ethereum has risen in recent months, rising to historic highs … [+]
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The Ethereum update, known as EIP-1559 and part of a broader move to ethereum 2.0, will see the revision of the current network trading fee system, with users sending a fee to the network instead of the so-called miners who maintain the network. These taxes will then be burned, reducing the global supply of ether – something that is itself a controversial topic among the cryptocurrency community.
“If Bitcoin and its fixed offer are healthy money, then if you have a declining offer, do it [ethereum] ultrasound money, “Buterin asked, speaking at a recent episode of the Tim Ferriss Show podcast with Naval technology investor Ravikant.” “Healthy money” refers to the stability and usefulness of a currency as a store of value.
While Buterin called the question a “joke,” he went on to explain that there is a distinct possibility that the radical update to the ethereum network, approved by developers last week and expected to be implemented in July, could lead to a decline in supply. ethereum.
“If the requirements for using ethereum are high enough, then there would actually be more [ether] being destroyed than it is created, “Buterin said.” In fact, it is not even such an extravagant possibility. If you look at the transaction fees in the last month, they were actually many days higher than the block rewards for that day. “
The recent extreme ethereum price rally, which has seen ethereum add 400% since the wider bitcoin and cryptocurrency market took off in October, comes amid a wave of interest in decentralized finance (DeFi) – using cryptocurrency technology to recreate tools traditional financial instruments, such as loans and interest.
With many of the largest DeFi projects built over the ethereum blockchain, the symbol has grown as users flood the network. Meanwhile, the latest cryptocurrency craze for so-called non-fungible tokens (NFTs) has also led to heavy traffic on the core ethereum network.
When Ravikant warned that these applications that are built above the ether could fall victim to “hacks … burglaries and failures”, Buterin called the controversial cryptocurrency tether, which is linked to the one-on-one price with the US dollar, as a “bomb with tick clock [demon]”For bitcoin – highlighting the long-term competition between the two largest blockchain ecosystems.
The most recent Ethereum price rally saw its price well above the maximum values at the beginning of 2018 – with … [+]
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While most miners appear to be on board with the planned update of ethereum, some – including major mining group ethereum SparkPool – have recorded their opposition to it.
“I am concerned about a potential mining rebellion that could undermine the credibility of the etereum network,” said Richard Johnson, CEO of Texture Capital, in an email. Johnson added that he is “skeptical” whether the update will have a “significant” impact on ethereum fees, which have risen more than 10fold in the past 12 months.
Amid the rush to ethereum, a number of ethereum rivals have emerged in recent months, claiming to offer similar decentralized platforms, with faster transaction times and lower fees, and seeking to capitalize on ethereum issues.
“In the current course of cryptocurrencies, ethereum looks like it could fall victim to its own success,” Antoni Trenchev, executive partner of digital asset manager Nexo, said in e-mail comments. “The huge influx of users, developers, decentralized applications, DeFi protocols, along with the growing madness of NFT assaults the blockchain, make it crowded.”
However, Trenchev added that he expects to “see a real bull run pretty soon after the release of EIP-1559, with the real bull of the bulls with ethereum 2.0”.