Ethereum Proposal is Primed to Delay ‘Difficulty Bomb’ and Reduce Block Reward

John Medley

Earlier today, 14 Ethereum developers met over video conference to discuss changes to the proposed ‘difficulty bomb’ and block reward.

They agreed to support the EIP1234 that would decrease block reward from 3 ETH to 2 ETH as well as delay the ‘difficulty bomb’. The proposed EIP1234 would be added to the Constantinople upgrade, scheduled for October.

The postponement the difficulty bomb – a feature designed to increase the difficulty of mining rewards, making mining less attractive – has been received well by the community despite the fact it is considered a controversial topic - especially for miners invested heavily in hardware.

Many traders are in favour of the 2 ETH block reward as it reduces Ethereum’s inflation rate which is currently greater than that of Bitcoin.

It is thought that the reduced mining reward would constrain the supply, in turn reducing the selling pressure from miners. According to a Twitter thread from Eric Conner, the Ethereum network has paid $6.6 billion to miners over the past 365 days:

Some members of the community, however are not happy with the lack of discussion. Ethereum miners and investors who were present at the previous meeting regarding the Constantinople upgrade were excluded from today’s meeting. Some have seen this as a controversial decision, because the difficulty bomb and block reward reduction is likely to have a greater impact on miners than developers.

With over a month until the Constantinople upgrade, it remains to be seen whether the wider community of investors, traders, miners and developers will rally in support of EIP 1234.

Bitcoin’s Price Surges Nearly 10% to Surpass $8,000 as Crypto Market Adds $20 Billion

The price of bitcoin, the flagship cryptocurrency, has recently surpassed the $8,000 mark in a move some believe is extremely bullish and could help it go up to $20,000. What’s behind the rise is unclear, although a counter trading indicator pointed towards it.

At press time, BTC is trading at $8,055 after rising 10% in the last 24-hour period, according to CryptoCompare data. The flagship cryptocurrency’s market cap is now of $142 billion, and its recovery came merely days after it had a $1,000 ‘flash crash’ caused by a 5,000 BTC sell order.

Bitcoin's price performance in the last 24-hour period

It’s currently unclear what’s behind the cryptocurrency’s rise, although some have pointed out tensions between the United States and China may be helping, as bitcoinj’s price has been moving up when trading volumes are higher on Asian exchanges.

The U.S. recently hiked tariffs on $200 billion worth of Chinese goods, with China retaliating with higher levies on billions of dollars worth of U.S. products. These developments severely affected the stock market, and could be seeing investors hedge with bitcoin and other cryptocurrencies.

Notably, some could have predicted BTC would surpass the $8,000 mark this weekend as CNBC’s Fast Money Twitter account recently posted a bearish tweet showing a head and shoulders pattern, which implied a drop was imminent.

In the cryptocurrency space CNBC’s tweets are seen as a counter trading indicator, as often bitcoin does the exact opposite of what the financial news outlet’s social media accounts predict will happen.

The cryptocurrency’s price rise also comes as search interest for it hits a 14-month high, according to Google Trends data. This means that search interest for BTC hasn’t been this high since February of last year, when it was trading between $8,000 and $11,000.

Mati Greenspan, a senior market analyst at eToro, has noted the cryptocurrency’s price performance is bullish, and that there could be “virtually no major levels of resistance until $20,000.”

Recently, the co-founder and CEO of digital asset exchange Gemini, Tyler Winklevoss, called bitcoin “gold 2.0.” Facebook has also shown it’s getting more serious about blockchain, cryptocurrencies, and payments, which could be heightening interest in the space.

Bob Iaccino, an experience fun manager and veteran trader, has earlier this week argued that the growth of BTC’s layer-two scaling solution, the Lightning Network (LN), could also be supporting the cryptocurrency’s rally.

Altcoins Follow Bitcoin’s Rally

Available data shows that most altcoins have followed the flagship cryptocurrency’s rally, with most being up well over 3% in the last 24-hour period. Top altcoins like Ethereum’s ether, litecoin, XRP, and Zcash are all up by over 7%, with ether rising nearly 10% to trade at $258.

Interestingly Bitcoin Cash, a cryptocurrency that has recently seen a hacker take advantage of an upgrade to get miners to mine empty blocks and that has seen a mining pool have over 51% of its hashrate for a brief period, has risen over 16% in the same period. BCH is currently trading at $415.

Dash and Cosmos are other cryptocurrencies that have risen over 10% in said period. Overall the rally has seen the crypto market add over $20 billion.