January 04, 2019 | AtoZ Markets - This week, Binance announced on its official website as well as on Twitter account, that it will support the upcoming Ethereum's Constantinople Hard Fork. The new project offers five different proposals for improving Ethereum (EIP).
Binance Role in Upcoming Event
Binance company is one of the leading cryptocurrency exchanges with a market capitalization of BNB in the amount of 1.3 billion dollars by January 2018. As Binance official note states, the exchange encourages its users to "leave sufficient time for deposits to be processed in full prior to the block height shown below." The company ensured their users that they will handle all "technical requirements involved" for the ETH holders in their accounts. Hard Fork Ethereum (ETH) is scheduled for January 16th. Depending on the height of the target block this may occur several hours before or after the planned date.The scale and excitement around the update have led to a significant increase of ETH prices over the past 2 weeks. The exchange reported that a block height of 7,080,000 units is planned for the fork, which is estimated to happen between 2019/01/14 and 2019/01/18. Binance also addressed to their users asking in case of any breaks or takeoffs of the chain during close exchanges to contact them for further discussion." Presumably the exchange did so to find out whether they would list tokens and how they could safely provide the users with dropped tokens.
How It All Started?
The decision to promote the use of a hard fork was made by Ethereum developers during a two-week meeting on December 7. As mentioned earlier, on the basis of the new Ethereum project, five EIPs were presented, which will permanently replace the ETH blockchain with new incompatible updates with reverse time. According to the experts, this may mean that the Ethereum nodes either update together or end up launching a separate blockchain entity, branching out the cryptocurrency. A similar event has already occurred during Ethereum existence when Ethereum Classic appeared. The hacker attack in 2016, when $ 50 million was stolen from the platform led to a split and the creation of two parallel networks. Although this time it seems unlikely that a chain break will occur, it is still possible. According to the developers, this new hard-fork will not contain many changes for end users, as this is an “update for maintenance and optimization”. Crypto experts stated the blockchain fork significantly changes the economic policy of Ethereum and postpones a bomb of complexity that activates its fall and stagnation.
ETH Price Increased Because of the Upcoming Hard Fork?
In the middle of December last year, ETH ranked 3rd in market capitalization after XRP ousted King of Smart Contracts from slot 2. At the same time, ETH was trading at $ 83. Because of the confidence in the hard fork, which might entail a significant improvement in the network, interest in ETH re-emerged, which led to the digital asset regaining the number 2 few days ago. Incoming hard fork increases demand for the Ethereum tokens, as financial analysts have noticed. This hard fork will see a decrease in Ethereum miner's remuneration from 3 Ether to 2. Blocking time will also decrease, which will increase network speed. It is expected that after this the Ethereum hard fork will move from the work inspection protocol to the stake proof.The price of cryptocurrency increased by more than 80% since in December it reached a minimum of $ 82. ETH is currently estimated at $ 153, an increase of 84.3% over a period of fewer than three weeks, compared with a cost in mid-December.
Forks Not Always Lead to Crypto Value Increase
Meanwhile, some people mistakenly believe that cryptocurrency forks always increase their value. Sometimes the opposite happens and hard forks lead to a slight drop in prices of crypto. In July 2017, when Bitcoin Cash was forked on bitcoins, the price of bitcoin fell by 4%, despite the good months before the fork. Prices later rose to a record high five months later. Bitcoin Cash also experienced a fall in prices last November, when Bitcoin SV was separated from them. Prices fell rapidly and continued to decline in the following weeks. Earlier in August 2018, the CEO of Binance Changpeng Zhao in an interview with one of the local medias said that any open source platform offering smart contracts (for example, Ethereum, EOS) would not be fast enough to succeed in the long term. Zhao ("FAQ") noted that he believes that Ethereum or any similar companies will overtake projects that give developers the tools to write blockchains for specific purposes.
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