For the first time, bitcoin has set a new record on its value that had risen by almost 20% just over the past week.
This data reached after the electric carmaker billionaire Elon Musk released a tweet about the digital currency’s plan to enhance its software for the first time in four years.
As stated by Coinmarketcap, the value of bitcoin last week was $US 33,531. But since the spread of the report, Bitcoin trading has reached approximately $US 40,000 on Wednesday dawn, AEST.
In addition to that, the currency has risen to 10 percent on Monday. Right after Elon Musk’s tweet regarding his company Tesla’s scheme to adopt bitcoin as means of payment in the future.
In just a matter of time, bitcoin’s value had plummeted shortly after reaching its peak. The cause of the incident was mainly because of the heightened environmental concerns in relation to bitcoin mining. Even though billionaire Musk is one of the individuals who can make such a massive impact on bitcoin’s value just by a lone tweet, cryptocurrencies’ quality for being known to be volatile was again proven this time.
The Drop before the Rise
In mid-April, bitcoin had dropped almost 40 percent from its peak of $US 64,829. Even so, the currency is still more than four times bigger compared to the same time last year.
Experts suggest that the reason behind cryptocurrency’s fluctuation regarding its value is the over the weekend news relating to the upcoming upgrade to its code. The improvement that everyone’s been waiting for since 2017. On the other hand, even though Musk’s comments on social media might have affected a temporary value on bitcoin. It is more likely not the cause.
Caroline Bowler, chief executive of Australian crypto exchange BTC Markets, made a comment to The Australian Financial Review stating that the bitcoin community will be facing a very important deal on the upcoming upgrade. Bowler also added that Elon Musk’s involvement over the weekend’s issue does not really have much effect.
They had named the approaching upgrade, Taproot. The upgrade will be in effect in November and the existing miners globally authorize it. This change focuses on highlighting its transaction productivity and privacy. On top of that, it might also unlock a possible trade for smarter contracts.
Using Smart Contracts
It is famous that one of its competitors – Ethereum cryptocurrency, uses Smart contracts as its essential element. Smart contracts allow complicated transactions which users directly manage. It can be found straightly on the blockchain instead of needing a third party to process.
Fred Thiel from bitcoin mining specialist Marathon Digital Holdings informed CNBC on Sunday that smart contracts can benefit and open the blockchain’s applications and businesses opportunity for its users.
An exchange platform with its underlying protocol specifically built on bitcoin called Lightning Network is a program wherein smart contracts can now be easily acquired. However, less preparation also means a higher cost of transactions.
If Taproot launches, it will significantly impact how bitcoin will function. Some of these are replacing digital signatures. It results in an affordable smart contract and freeing some space in terms of blockchain.
Alyse Killeen, whose part of Stillmark investment firm, sees this movement as a mind-blowing potential. A Lightning transaction can be a fraction of a penny, but a Bitcoin transaction at the core protocol level can cost a lot more than that, she added.
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