Ethereum extends gains to rise 8%; bitcoin firms

Ethereum extends gains to rise 8%; bitcoin firms

A representation of virtual currency Ethereum is seen in front of a stock graph in this illustration taken February 19, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

Cryptocurrency Ethereum extended gains to rise more than 8% on Monday to $2,587 but remained 40% below a record high of above $4,300 hit earlier this month.

At 1153 GMT, it was trading up 7.4% at $2,565.69.

Larger rival Bitcoin also gained in its wake with the world’s biggest and best-known cryptocurrency rising 3.7% to $36,977 in quiet trading with London and U.S. markets shut for holidays.

Bitcoin has been less volatile in recent days but is down by more than 35% this month, weighed by growing regulatory pressures on the sector.

Latest positioning data for the week ended May. 25 confirmed the trend with net short positions nearly doubling from the previous week, which was the smallest net short since late March last year.

In the latest salvo against the cryptocurrency, Bank of Japan Governor Haruhiko Kuroda said much of the trading was speculative. His remarks followed China’s recent efforts to crack down on mining activities. read more

It is currently trading at levels last seen in February and at roughly half its peak value of $65,000 seen in April.

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Ex-Head of China’s Digital Yuan Effort Says CBDCs Could Operate on Ethereum

The former head of the digital currency initiative at the People’s Bank of China (PBoC) said central bank digital currencies (CBDCs) are set to become more “smart” and could one day operate on blockchain networks like Ethereum.

Yao Qian, now director of the Science and Technology Supervision Bureau of the China Securities Regulatory Commission, said over the weekend that CBDCs shouldn’t attempt to be just a digital form of physical cash, but should incorporate smart contract functionality, Sina Finance reported Monday.

Smart contracts are automatically executing pieces of blockchain code that carry out functions when certain conditions are met, and can also be designed to complement or replace legal contracts.

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Yao told the International Finance Forum 2021 Spring Conference in Beijing, however, that the number of security incidents arising from smart contract vulnerabilities shows the technology still needs to mature. Further, there are concerns over the legal status of digital contracts, he said.

As such, central banks should take a cautious approach, starting with simple smart contracts and building complexity as security and legality become more assured.

Yao led the central bank’s digital currency research lab from its inception until he left the PBoC in 2018, moving to the China Securities Regulatory Commission at the end of 2019. He is cited as author or co-author on many of the central bank’s patent applications relating to CBDC technology.

The People’s Bank has been working on trials of its digital yuan with commercial banks and payment providers. However, a CBDC needn’t necessarily be account-based, Yao said.

In theory, via a “two-tier” approach, a digital yuan or digital dollar could sit on Ethereum’s network, or that of the Facebook-backed Diem (formerly Libra). That would mean central banks could provide CBDCs directly to users without needing intermediaries.

More than 5 million ETH has been sent to Ethereum 2.0’s deposit contract

The amount of ether (ETH) in the Ethereum 2.0 staking contract has broken above the 5 million mark, according to The Block’s Data Dashboard. The current amount in the contract is 5.2 million ETH, worth $13.6 billion. One ETH is currently priced at $2,630.

The Ethereum blockchain is undergoing a shift from a proof-of-work consensus mechanism to a proof-of-stake one, as part of the main Ethereum 2.0 upgrade. This will move the blockchain away from being reliant on miners to process transactions, instead allowing anyone who is willing to stake 32 ETH to process them instead — at the risk of losing their coins if they act maliciously.

According to the Beaconcha.in explorer, there are currently 152,000 validators (as opposed to miners) processing blocks on the proof-of-stake network. These validators have a roughly 99% success rate for blocks, with around 1% of blocks missed per day.

The deposit contract is where Ethereum users need to send their ether if they want to stake them on the network. The amount of ETH in the deposit contract represents the upper limit of the amount of funds that are being used for staking on the network.

Those staking ETH on the network can receive rewards of up to 23%. But there’s a catch; both the deposits and the rewards can only be withdrawn once phase 1.5 of the Ethereum 2.0 upgrade goes live, which is scheduled for 2022.