Ethereum Reclaims Its Spot as the Second Highest Valued Cryptocurrency

Ether resumed its place as second largest blockchain by total valuation. But is that enough to remedy the growing issues with the token?

Ethereum Reclaims Its Spot as the Second Highest Valued Cryptocurrency

After over a week of Ripple controlling the crypto-news headlines, ether is back to making waves. Ether finally resumed its spot as the second-largest blockchain in total value. At the time of this writing, current valuation sits at $1,191.02 for Ethereum. 

Just days ago, Ripple's XRP managed to best ether. The return to 'prominence' for ether might be encouraging to some investors, but others have noted a slew of technical problems that not even rising values can fix. 

Most of these issues get discussed throughout internal dev channels, according to CoinDesk's reports. However, the issues could be closely tied to basic blockchain functions. A recent example comes in a software glitch used to figure out how much a transaction should cost to send. It's called the "gas oracle," and it's led to huge inflation of user fees. And by huge, some of Ethereum's algorithms have forced users to overpay for transactions by nearly 70 percent at times. 

One of Ethereum's developers even told CoinDesk "something odd has been happening with the estimated gas price." 

"While it's still possible to transact on the network at a fairly low price, the oracle started returning increasingly high estimates," said developer Nick Johnson to CoinDesk

These tech issues are also plaguing Ethereum's future projects, as insiders noted. Casper, the ecologically-friendly attempt for cryptocurrencies, is currently splitting into "incompatible forks," according to CoinDesk

And the issues don't just weigh in the minds of investors. Some of cryptocurrency's biggest leaders also struggle with the often massive waves of changes in the market. This includes Ethereum's own co-founder Charles Hoskinson, who talked to CNBC recently about the impact of "unrealistic" cryptocurrency projects entering the market. 

"My personal opinion is that we're going to see a consolidation after a crash."

"My personal opinion is that we're going to see a consolidation after a crash," Hoskinson told CNBC. Hoskinson no longer serves as chief executive for the company, but he now runs blockchain research firm IOHK. 

"What's going to occur is a lot of these ventures that don't have strong fundamentals, don't have good tech, or just unrealistic projects, they will eventually run into some major wall they can't quite overcome. They will fracture up and you will see a lot of them are certain to fail."


What Caused the Massive Plunge Ripple's XRP Took Yesterday?

"The problem is a lot of them have a lot of money," Hoskinson said. "It's really hard to fail when your burn rate is $5 million or $10 million a year, and you have $1 billion of capital."

Dog-inspired cryptocurrency Dogecoin founder Jackson Palmer noted last week that it was a little odd that his own company's virtual coin had such high valuation despite not having a software update in over two years. 

"I have a lot of faith in the Dogecoin Core development team to keep the software stable and secure, but I think it says a lot about the state of the cryptocurrency space in general that a currency with a dog on it which hasn't released a software update in over two years has $1 billion market," he said on Twitter.

Via: Coin Desk, CNBC