EIP 1559: Bitcoin hit record high after software upgrade

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EIP 1559: Bitcoin hit record high after software upgrade

- The digital currency was near to a two-month high thanks to a software upgrade that will trim the speed at which fresh tokens are issued.

The largest cryptocurrency after Bitcoin was $2,678 as of 9: 32 a.m. in Hong Kong on Thursday, holding most of a 9% jump from a week earlier. Bitcoin was steady at $40,000 in 2017.

In some ways, the optimism about the upgrade, known as London or EIP 1559, resembles the hoopla surrounding previous reductions in the block rewards for Bitcoin miners. While So-called halvings were planned events, Bitcoin typically rallied in anticipation that demand would either remain stable or increase while the pace of issuance slowed.

While this upgrade doesn't permanently hit ETH like Bitcoin's 21 million it will increase the net new issuance of ETH, slowing its supply and increasing the asset's scarcity, Fundstrat Global Advisors LLC wrote in a note Wednesday.

Still, Ether - like Bitcoin - is well off its record highs. Speculative excesses have been exempted and Ether has earned its status in the crypto ranks, said Bloomberg Intelligence's Mike McGlone.

While the upgrade could be behind Thursday's rally, McGlone also like it for the long term. I like the go-to platform builder foundation for Ethereum, per the digitalization of money and finance, he said.

The London Change will split the approximately 13,000 new Ethers issued in three parts to pay miner payment 'gas fees' on a daily basis. One of these, the floating or minimal fee that users pay to process transactions, will be removed from circulation in a process known as burning. Some experts have called Ethereum one of the most important upgrades in the history of Ethereum.

In addition, the supply could decline further if the Ethereum blockchain moves to a different mechanism of verifying transactions, which could happen in the first quarter of next year. Such a new verification system will use computers supporting the Ethereum network to stake Ether coins instead of miners in most cases.

'The most exciting thing about the new Ethereum London upgrade is that it burns Ethereum, which is great for the price of ETH and a big win for speculators, said Matthew Gould, founder of Unstoppable Domains, an Ethereum-based blockchain-based domain name provider, in comments Tuesday. 'However, the upgrade represents only a major improvement to the network, with minor improvements coming next year.