Ethereum—the second largest cryptocurrency—is strongly connected to the rise and fall of bitcoin.
The cryptocurrency market suffered a shaky start to 2018, with prices steadily dropping resulting to the loss of more than half of its market value.
A dull and unexciting trading period has led to Ether and BTC prices stagnating below their expected target. The decline in prices of cryptocurrencies towards the end of 2017 sparked fears that the bubble was about to burst.
But, prices have started stabilizing after Tax Day and after suffering a shaky few weeks, Ethereum prices have gone up over $500, registering a 1.89% increase.
As of Today, April 19, 7:34 a.m, ETH was trading at $523.98.
With Ether breaching resistance at $500, traders are hopeful that prices will continue to increase steadily with the arrival of new traders interested in buying.
Not Just an April Fool’s joke
Ether founder Vitalik Buterin published a proposal to place a cap on the total limit of available Ethereum back in April 1.
Buterin published this proposal in hopes of generating a discussion over whether or not the fundamental economics of the currency should be changed.
Introducing a cap has always been a controversial subject among traders. However more coins without caps are entering the market everyday, threatening to collapse the currency.
Buterin played with the idea of putting a cap of 120 million coins for Ether, citing concerns of “economic sustainability” as his reason.
Buterin outline his idea further in a developer meeting last week. Although his comments were initially welcomed with opposition from other core developers, the atmosphere took a sudden shift to serious reflection.
Market caps always warrant serious discussions.
For one, critics talk about ether’s role in enforcing the platform’s security. Putting a cap, they fear, would make the cryptocurrency a pure speculative investment play, something that a lot of developers worry will result to a more challenging task of updating the protocol.
Others complain on what they claim is a poorly timed and badly researched issue.
One of Ethereum’s leading developers Vlad Zamfir says of the proposal, “I don’t think that we have the understanding required to actually meaningfully know what we would be consenting to.”
Criticism of the proposal stems from concerns that rising prices could hamper the growth of Ether.
Buterin, however, stressed that transaction fees are not relative to Ether’s price, rather suggest demand for the platform. Put it simply, fees used for Ether’s platform would remain unchanged, irrespective of rising prices, because the amount of transactions will remain the same