Yesterday, developers leading the charge on Bitcoin’s next hard fork changed their minds—they decided not to pursue the SegWit2x upgrade. Which, by the way, is a perfectly timed distraction for Ethereum.
Maybe now investors can forget that $150.0 million’s worth of ETH was lost on the blockchain this week. No idea what I’m talking about? Let me explain…
It all starts with “smart contracts.”
Smart contracts are coded to unlock data once specific conditions are met, and anyone can design them. Often they are used to transfer money in exchange for a service.
One company, Parity Technologies, wrote an extremely popular contract for storing ETH. Some random developer found a bug in that code, and in doing so, accidentally froze millions of ETH.
The only way to unfreeze that money is to restore the blockchain to an earlier version. Makes sense, right? By restoring the network to before the event took place, you can pre-emptively fix the problem.
But that’s where we run into an issue…
A lot of miners are refusing to restore the blockchain because they believe that meddling with the ledger is tantamount to “cooking the books.” These tend to be the same folks who argue that Parity, not Ethereum, is at fault for the entire situation.
Considering that Parity wrote the code, they might have a point…
In any case, this should have been front-page Ethereum news, were it not for the fact that even bigger Bitcoin news surfaced this week; namely, that developers are calling off the SegWit2x upgrade.
This upgrade was supposed to spark a civil war in the Bitcoin community. But instead, the mutineers seems to have struck a peace treaty. Here’s what the fork’s designers had to say:
“Our goal has always been a smooth upgrade for Bitcoin. Although we strongly believe in the need for a larger blocksize, there is something we believe is even more important: keeping the community together.
Unfortunately, it is clear that we have not built sufficient consensus for a clean blocksize upgrade at this time. Continuing on the current path could divide the community and be a setback to Bitcoin’s growth. This was never the goal of Segwit2x.”
(Source: “[Bitcoin-segwit2x] Segwit2x Final Steps,” lists.linuxfoundation.org, November 8, 2017.)
As a result, the bad Ethereum news was drowned out. The Ethereum to USD exchange rate appreciated 4.79% to $313.36, and the Ethereum to Bitcoin rate jumped 7.22% to 0.04345990 BTC.
Daily Ethereum Chart
At present, our $1,000 Ethereum price forecast is unchanged, but we are monitoring the situation closely until it is resolved.