BITCOIN and other cryptocurrencies like Ripple and ethereum are taking markets by storm and a trader has revealed why ethereum is having an amazing run.
Ethereum is just one of many digital tokens which make up the cryptocurrency craze, but trader Brian Kelly has revealed why the currency is here to stay along with other investor favourites, Bitcoin and Ripple.
Ethereum is a blockchain platform which allows developers to build on and hosts smart contract which can be used to transfer money. The network is powered by an underlying cryptocurrency, ether.
Speaking to CNBC, he said: “Ethereum really has been a big performer so what do we have here?
“Why, since the first of the year do I think there has been a driver.
“We have a software upgrade, for those of you who know what’s going on, it’s the Caspar Tesnet came out on January 1st.
“What does that mean? It’s an upgrade to the ethereum software in a sense, what does it do?
“It’s the first step toward moving away from energy intensive mining”
Currently, ethereum relies on a Proof of Work system where miners need to solve complicated algorithms to keep the network running.
The new year upgrade to a ‘proof of stake’ system will make everything faster and cheaper as the network continues to grow.
This will make ethereum miner’s redundant and reduce the huge energy costs from mining which is one of the main criticisms of cryptocurrencies.
Kelly said: “We’ve all read the articles about bitcoin mining take so much energy as a small country, there’s a potential for mining ban in China, well with the Casper upgrade, ethereum is going to be able to move, or start to move in the direction of what’s called proof of stake.
“I don’t need all those big energy intensive miners if I use proof of stake so, number 3, we’ve talked about the potential mining ban, as ethereum over towards this the value of not having to rely on miner’s become more valuable to them.”