Ethereum software upgrade enabled; ether cancels losses, exchanges

  • Upgrade part of the bundle of adjustments called London
  • Software Upgrade to Reduce Ether Supply
  • Ether rallies, bitcoin stays down

NEW YORK, Aug.5 (Reuters) – Ethereum, the second-largest blockchain network, underwent a major software upgrade on Thursday, which is expected to stabilize transaction fees and reduce the supply of the ether token.

After initially trading lower before the upgrade, Ether picked up momentum, up 2.6% to $ 2,796. .

The adjustment, called Ethereum Improvement Proposal (EIP) 1559, changes the way transactions are processed on Ethereum by providing clear pricing on the ether transaction fees paid to miners to validate transactions and “burn” a small amount of money. these tokens. The burnt tokens will be permanently withdrawn from circulation.

Register now for FREE and unlimited access to reuters.com

Register now

After the upgrade, 539.29 Ether Tokens were “burned” late in the morning in New York City, according to Ultrasound.money, a website that tracks the burning and supply of ether.

When burning tokens, the tokens are sent to specialized addresses that have unobtainable private keys. Without access to a private key, no one can use the tokens, putting them outside the circulation supply.

By reducing the supply, tokens that remain in circulation become rarer and more valuable.

EIP 1559 is part of a software upgrade bundle called London. Thursday’s Ethereum event is called a London hard fork, which means miners or developers must download London to stay connected to the network.

Market participants have said that activating EIP 1559 is expected to increase the price of ether, as this move will reduce its supply.

The ether initially weakened when adjusting the software and afterwards, but has since recovered.

“Everyone should be watching how the next few weeks unfold and the emergence of financial models quantifying the impact of combustion on the ether supply, which could ultimately lead to price targets,” said Viktor Bunin, specialist protocols to the Bison Trails infrastructure platform.

“The new dynamics of the ether supply can trigger a new virtuous cycle where higher prices lead to greater adoption and vice versa. The more users and developers who enter the industry, the more users and developers enter the industry, the faster we can develop the crypto-economy. “

Pankaj Balani, managing director of derivatives trading platform Delta Exchange, believes that for now, even with the London range, the price of ether remains correlated with bitcoin.

“If bitcoin recovers $ 40,000 and manages to hold it, we can see Ether rally more and test the $ 3,000 mark,” he said.

Balani has remained bullish on the medium to long term Ether as the Ethereum network expands with all the applications it contains. He expects the ether to eventually outperform bitcoin in the longer term.

By late morning, bitcoin slipped 2.2% to $ 38,876.

Register now for FREE and unlimited access to reuters.com

Register now

Reporting by Gertrude Chavez-Dreyfuss; Editing by Jason Neely, Kirsten Donovan and Mike Harrison

Our Standards: Thomson Reuters Trust Principles.


Source link

Comments are closed.