That heated up the somewhat bearish Ether and sent it to new heights regarding fiat prices.
To understand why a software update could have this effect, you have to understand what Casper is and why the project is being advanced.
Essentially Ethereum has historically used a Proof of Work algorithm for mining. Like with Bitcoin, people use a software/hardware combo to confirm transactions, and they are rewarded with newly minted Ether (this is where Ether comes from).
However, that system was not meant to last.
Ethereum has a difficulty spike called Ice Age built into its code. The idea was to essentially make it so Ether got harder to mine as time went on. Thus, less new coins would be created. Thus developers would be forced to create an alternative to PoW.
In other words, the Ice Age difficulty bomb was built in to get the developers to switch to a different system like PoS down the road. Here we are, down the road, and everything is going as planned.
Thus, Casper is an important and long-awaited step in the evolution of the Ethereum network, and it is thus a big deal.
The PoS system will reward those who hold Ether in a wallet. It is a proof of ownership system that creates new coins for those willing to hold the coin. Once this goes live, the PoS system will replace the old PoW system. We aren’t there yet; it is still in the testing stages.
This fact is what helps us understand why Ether is on the move. You have Ether being bid up not only over the news, but because those who want to be privy to the interest-like mining system need a good amount of Ether to do it. I think it is 1,000 Ether. Thus, demand and awareness of Ether have led to it breaking $1k (on some exchanges) for the first time.
Corrections are common in cryptocurrency, so the article that touts $1k today is always bound for upward or downward revision in the short term. Still, Ethereum is a force and the necessary update being in the works means things just got a lot more force-y-er.
- Lightning Network For Ethereum? ETH Surges as ‘Casper’ Approaches Casper will change Ethereum from a Proof-of-Work to a Proof-of-Stake network. Financemagnates.com
- Casper. GitHub.