Ethereum Price Jumps On Major Bank Approval And Approaching Proof-Of-Stake

Ethereum has risen sharply after the cryptocurrency's founder Vitalik Buterin signaled a switch to so-called proof-of-stake is "no longer so far away," topping off a strong week for ethereum that began with U.S. bank JP Morgan Chase revealing it had created an enterprise version of the ethereum blockchain.

Speaking at a conference in Prague, Buterin outlined the path to ethereum 2.0, which he now calls Serenity, and is designed to solve ethereum's scalability issues — something that has created challenges for many major cryptocurrencies. 

The ethereum price is up by 4% over the last 24 hours, adding some 8% over the last week, to trade at highs of $210 yesterday.

Ethereum currently handles around 15 transactions per second, but this could be increased many fold under proof-of-stake.

Ethereum currently works on a proof-of-work algorithm, which is computing power-intensive and becomes more so as the system develops. The new system will mean the more tokens that a node owns, the more chance it has of winning the race to verify the next block.

However, Buterin was not specific about when the change to proof-of-stake will happen.

“Launch is basically the milestone that we’ve all been waiting for, that we’ve been working toward for the last four to five years, and a milestone which is really no longer so far away," Buterin told DevCon 4 conference attendees.

The weekend boost for the ethereum price follows a strong week for the ethereum's tradable token, ether.

At the beginning of last week JP Morgan revealed it had created an enterprise version of the ethereum blockchain – known as Quorum – which allows for the operation of smart contracts.

"We are big believers in ethereum," JP Morgan's New York-based head of blockchain initiatives, Umar Farooq told Financial Review.

"There are people outside our firm using Quorum to tokenise gold, for instance. They wrap a gold bar into a tamper-proof case electronically tagged, and they can track the gold bar from the mine to end point – with the use case being, if you know it's a socially responsible mine, someone will be willing to pay a higher spread on that gold versus if you don't know where it comes from. Diamonds is another example."

Farooq's comment come after JP Morgan chief executive Jamie Dimon praised blockchain technology but described bitcoin as "a fraud" in 2017.

Meanwhile, Commonwealth Bank recently issued a bond for the World Bank on a blockchain created using the ethereum source code.