An “explosive growth” due to an Ethereum network change is on the horizon. This upgrade limits the amount of Ether tokens in existence, experts reported. Ethereum blockchain developers approved the changes Friday and should be operational by July or August.
Known as EIP-1559 in Ethereum parlance, the move will recondition the Ethereum system. Users will now be able to send a base transaction fee to the same network. This action will lead to the destruction of Ether tokens, ultimately reducing the number of outstanding tokens.
Limiting Ether means a higher a price
Cryptocurrency analysts support this move. By limiting the existence of Ether tokens, like Bitcoin, can result in pressure on the price of the digital token. Therefore, with the recent institutional interest in digital currencies, the price could sky-rocket.
“What is most exciting to cryptocurrency traders is: now Ethereum will reduce the amount of outstanding Ether by destroying some of the tokens every time it’s used to process some transactions,” Edward Moya, chief market analyst at currency firm Oanda told Insider.
“Ethereum’s never-ending supply was the least attractive part about it. Now, optimism is growing that the world’s most-used blockchain will see a major shift in retail and institutional buying.”
Justin d’Anethan, sales manager at cryptocurrency exchange Equos, told Insider changes to the Ethereum network should “not only make the blockchain more eco-friendly” by making transactions more efficient, “but should also make it more scalable.”
He added: “Add to this fewer coins in circulation, and you have a recipe for explosive growth.”
Meanwhile, Rahul Pagidipati, chief executive officer at ZebPay, told Mint: “What the FM said is encouraging for the blockchain companies in the business. It may permit millions to work in this new industry. Experimentation, innovation, and create blockchain solutions to serve the greater good will be supported. We may one day look back at the FM’s thoughtful statement as a turning point.”
Surprisingly, Ether’s price gained 130% since the start of 2021. On Monday, the digital currency reached $1,734. Ethereum network’s Improvement Protocol-1559 launches by July or August and is part of “London hard fork” system improvements.