Ethereum Price Exceeded $1000! Nevertheless, Things are not So Simple
In early January, Ethereum exchange rate set its first record, breaking the $1,000 mark. The rate growth was caused by news of the successful launching an alpha test network for Casper protocol. However, the event is clouded by a number of technical problems.
Ethereum seems to have made a good start this year. At the beginning of January ether price has risen more than 100 times as well as Ethereum rate has increased by 25 %, compared to the same period last year. In the future Ethereum is expected to continue its rise, largely due to the Casper protocol.
The reason for creating Casper is an attempt to eliminate disadvantages of the Bitcoin Proof-of-Work protocol. Proof of work is a requirement to perform a certain complex task. In case of Bitcoin, proof of work is a very expensive computer calculation with the goal of creating new blocks. Therefore, Bitcoin mining guzzles more electricity than than 159 individual countries!
Casper is a new Proof-of-Stake consensus protocol, which does not require a large number of computers constantly making calculations. With proof of stake, the choice of a creator of a new block depends on users’ wealth, also defined as stake.The higher stake a user has, the more chances for him or her to be chosen for earning a transaction fee.
Unfortunately, Casper has not proven to be a successful innovation yet. The ether price rise can not hide the wave of technical problems caused by Casper testnet. The most concerning problem is an overcharge of transaction fees. Some users had to overpay for transactions by 70% percent! Another problem is Blockchain syncing errors requiring several days to be fixed. Some experts believe that new problems will emerge with the future load increase in the testnet.