WHY IS THE PRICE OF ETHEREUM RISING!? - Crypto Nights Episode #13
Ether at an all new high
It’s been an interesting week in the world of Crypto’s. On Thursday we finally saw the price of Ether set a new record high just under $415. Despite a slight lull over the past couple of months, it’s been a fantastic year for the crypto currency with a not so modest appreciation circa 5,000%. To think in January, it was trading at $8
This now puts a value on all the ether in circulation at $39 billion, compared with Bitcoin’s $139 billion. When we add up all the market value of crypto’s that are in circulation, its just surpassed the quarter-of-a-trillion mark!
Before we bring out the champagne, the question that comes to mind, is why? Why is the price beginning to soar? One clue might be found in this chart that is circulating amongst traders.
As you’ll see, it compares the number of Ethereum transactions against other crypto currencies, with Ethereum’s 534,000 transactions over the past day accounting for over 50& of all trades in the crypto currency market. What it suggests is that we can start to see the demand for ether on the rise.
But we need to remember transaction volumes don’t tell the whole story. Why you might ask? You might remember us touching upon this in an earlier episode. Ethereum contains a programming language that lets developers write applications that interact with it’s blockchain, many transactions can also be automated by programs.
It’s not entirely clear what % of transactions are completed by bots or applications, or the significance of the data. As always, with crypto currency prices, the factors surrounding crypto prices continues to remain a mystery.
What has the Ethereum blockchain got in store?
Developers of Ethereum are looking to use code for their their experimental Casper proof-of-stake protocol as the basis for a new test network. ethereum founder Vitalik Buterin said that not only is Casper ready to be tested, but that it could provide a security boost when testing code across clients.
For anyone unsure on Casper update it’s a security-deposit based economic census protocol, meaning nodes acts as ‘bond validators’ to place a security deposit in order to produce blocks and participate in consensus. If a validator produces anything the Casper thinks is invalid, the deposit is forfeited along with the privilege of participating in the consensus process.
Ethereum developers and researchers are currently exploring two flavors of Casper: Casper FFG and Casper CBC
Casper FFG (Friendly Finality Gadget) is Buterin’s duplication of a proof-of-stake consensus algorithm. As stated in the Casper FFG whitepaper, “Casper is a partial consensus mechanism combining proof-of-stake algorithm research and Byzantine fault-tolerant consensus theory.”
This change will be an overlay to Ethereum’s current proof-of-work blockchain. Buterin’s proof-of-work would spread the blockchain as usual. However, every fifty blocks, a “checkpoint” will interrupt the chain and proof-of-stake will verify consensus through final validators.
Casper CBC (Correct By Construction) is the brainchild of Vlad Zamfir. Typically, protocols are fully complete before implementation. Zamfir’s design begins implementation with a partial protocol and builds to a complete protocol via input from a safety oracle. Simply put, Zamfir’s version of Casper places emphasis on protocol and that safety is used to reach the entire network.
While details about ultimate Casper implementation are thin, the final Casper will likely take from both of these methods.
In reference to our comments made in the post, please refer to:
- Episode 2 to learn about Nodes
- Episode 10 to understand how news can or can’t effect the price of crypto currencies
Shout outs
Our first shout out of the week goes to @juniusmaltby who’ll be joining us shortly on the show to share his thoughts on Ripple
Second goes to @jacobcards, a regular blogger and provides his insights into the world of Crypto’s.
As always don't forget to follow, subscribe, upvote and like and we look forward to seeing you next time!
@antonburton & @alexmavor
Nice write up. Eth is on fire right now. Unbelievable to think it was trading at $8 last January. All of this with only a quarter trillion market cap. I wonder what it will all look like once we hit the trillion dollar market cap. Exciting time ahead!
Glad you like it. Your completely right, exciting times ahead!
By the end of 2018, my forecast is that we will see a $.15T market cap.
Good video guys as always.
If you like ethereum, then you will love steem. My next post is going to be showing the differences between the two.
If you want, I know we talked about it in the past, but I will do an episode with you contrasting the two blockchains.
In full disclosure, I do own some ETH also so it isnt as if I am just bashing ETH.
Sounds awesome! Lets try set this up ASAP. Can you send an email to [email protected] & we can discuss the details.
Thanks
Anton
Hi Anton, nice video and write up. I think the chart would be better if it took the top 7 cryptocurrencies by transaction volume.
Ethereum, apparently does not account for 50% of all crypto currrency transactions! Whoever made that chart? I solo mined Ethereum until the difficulty made it impossible, I also invested in The DAO fiasco. I think there are just a small number of centralized mining pools now, ecconomies of scale and all that! Will be intresting to see how proof of stake works out. Not sure that I would trust an Ethereum Casper contract! With Ethereum contracts being prone to bugs and hack attacks. DAO, Parity Multisig x2, there's possibly been some ICO contracts breached too. The price rise could be in anticipation of a fork split (Ethereum cash) to rescue frozen Eth.
It would be interesting to see how many players are driving the Ethereum price. Is it one big one, a few or a larger trend? My suspicion is the first one, but I guess we will never know since accounts (so far) can be anonymized.