Ethereum, otherwise known as ETH or Ether, has long held the second spot on the cryptocurrency podium behind bitcoin. Much like the market’s most favoured token, Ethereum has spent years cultivating an established presence. But last week, users and developers discovered a fork in the digital ledger that provided a brief opportunity for counterfeiters.
Joseph Lubin, a co-founder of Ethereum and CEO of blockchain software engineering firm Consensys Systems, said in an email to Bloomberg that the fork opened up a “minor vulnerability”.
During its brief existence, people could have exploited money from the system by perpetrating a double spend.
Users worked quickly to solve the glitch, but the effects ricocheted through the market, causing it to slide by nearly 30 percent.
On August 23, the token traded at $3,341 (£2,427), and by August 26, it had slipped to $3,056 (£2,220).
Decentralisation meant users eventually had to come up with a fix of their own, and while they were successful, it took a few days to return Ether to its previous seat.
Ethereum ended the weekend with a value of around $3,200 (£2,325) between August 28 and 30.
And as the bank holiday came and went, it boomed.
On August 30, ETH hit a weekly high of $3,343 (£2,428) before stumbling down to $3,215 (£2,335).
But this morning, it rallied again and claimed a spot it hasn’t seen since before August.
As of August 31, Ether has climbed to a height of $3,431 (£2,492). The value is the highest since Ethereum introduced the London hard fork.
Ethereum activated the London hard fork on August 5, introducing some game-changing new features.
The hard fork added EIP-1559, an “Ethereum Improvement Proposal” that introduced a base transaction fee AND eliminates blind auctions and introduces an algorithm in its place.
The proposal also ramped up burning to complement the new algorithm.
Burning currencies creates “deflationary pressure” that reduces supplies and keeps prices constant, with $432 million (£313 million) burned since August 5.
Auston Bunsen, co-founder and CTO of blockchain infrastructure providers QuikNode, explained it created an “ecosystem” that is “driving down fees”.
The cryptocurrency community immediately welcomed the changes, which have propped up the coin since.
Ether has seen consistent stability since August 8 and has not dropped below $3,000 (£2,179).