Ethereum traded within a narrow range on Tuesday, as the market ran into a major resistance at the make-or-break $300 level. Behind the scenes, the blockchain community continues to battle over Byzantium – ether’s coming upgrade.
ETH/USD Faces Major Resistance
The ETH/USD fell more than 2% to $288.00 on Tuesday, according to Bitstamp. Prices fluctuated between $285 and $295. Ether remains firmly capped below $300, as evidenced by multiple failed rallies over the past week.
On the opposite side of the ledger, trendline support is observed near $280. Any sudden break below that level could push prices all the way back toward $250 or lower.
At present values, Ethereum is capitalized at $27.2 billion, according to CoinMarketCap. The market peaked above $37 billion in June. Record valuations were in reach earlier this month before China launched an attack on the blockchain community.
Blockchain Community Debates Byzantium Upgrade
Since July, the Ethereum community has been at odds over the upcoming Byzantium upgrade – the new protocol designed to boost the network’s functionality. The key dispute stems from the speed at which new ether blocks are mined.
Under the proposed protocol, EIP 649, ether blocks are mined ten seconds faster than they are under the current regime. To safeguard the integrity of the token, EIP 649 will also lower the reward miners receive per block to 3 ETH from 5 ETH.
Critics say that a smaller reward for mining is complicated by the so-called difficulty bomb, which is a code in the ether chain that makes it incrementally more difficult to mine. While the difficulty bomb is designed to lure miners to a different chain in the event of a fork, it could have far-reaching consequences,. One such consequence is eliminating the incentive to mine all together.
The Byzantium update has been postponed to block 437 million, which likely falls on Oct. 17 given current production speed.
Ethereum Founder Presents Interactive ICO Protocol
In a new whitepaper, Ethereum founder Vitalik Buterin and Jason Teutsch of TrueBit propose a new protocol for transforming initial coin offerings (ICO). The authors outline a system that seeks to produce an equilibrium between capped and uncapped token sales. This would allow the ICO to respond to buyers, thereby creating a market of dynamic, real-time valuations.
This new protocol would allow buyers to withdraw investment bids on ICOs. Behind the scenes, it would also evaluate the buyer’s position relative to the entire ICO. Such a protocol could potentially solve the problem of ICOs elling out too quickly.