- Ethereum co-founder, Vitalik Buterin, has hinted at a transformative network upgrade that could massively reduce costs.
- This news comes amidst a surge in major cryptocurrencies, spearheaded by Bitcoin and XRP, after a landmark legal ruling.
As major cryptocurrencies like Bitcoin and XRP enjoy a bull run, Ethereum, the second-largest cryptocurrency by market cap, is not lagging behind. Its co-founder, Vitalik Buterin, recently teased a new network upgrade that could drastically decrease costs and enhance transaction efficiency. This tantalizing revelation comes when the Bitcoin price has doubled since 2023, hitting a floor at $30,000 per bitcoin, and Ripple’s XRP almost doubled in just a week, creating a storm in the crypto space.
Innovative Upgrade on the Horizon
During the Ethereum Community Conference in Paris, Buterin unveiled plans to introduce account abstraction to the Ethereum network. Unlike other upgrades which required changes to the underlying protocol of Ethereum, this one is, in Buterin’s words, “super elegant”.
Account abstraction implies a shift from externally owned wallets to smart contract-based wallets. This transition facilitates the easy recovery of private key seed phrases, akin to resetting an email account password. Another potential perk of this change is the possibility of lower transaction fees via “signless transactions”, a long-term objective for the Ethereum network.
Buterin, at the conference, elaborated,
“If there are techniques that allow you to mold many signatures from any transactions, combine them into one object which is much smaller and can be much more quickly verified than verifying all of the account abstraction transactions individually. By doing so, you can save data [and] computation becomes 100 times cheaper.”
The proposed upgrade would also mean Ethereum users could receive various other cryptocurrencies and pay network fees without having to convert it to Ethereum. This is particularly beneficial on rollups, a mechanism that allows for transaction execution outside the blockchain’s first layer.
Analysts Keep Watchful Eye on Ethereum
Despite the excitement around the upgrade, the price rally of Ethereum has yet to break above $2,000 per Ethereum. Alex Kuptsikevich, FxPro senior market analyst, in an emailed note, stated,
“Ethereum has encountered a sell-off above $2000 but has maintained positive momentum.”
He adds that Ethereum’s performance sets the mood for a continuation of the bullish trend for the entire market, yet, for confirmation, we must wait for consolidation above $2000.
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