Ethereum up 3.4 per cent following major software upgrade

Experts think ethereum, the second-largest blockchain network, could be on the way to overtaking bitcoin after a major change.

Ethereum has had a massive surge in price after the cryptocurrency underwent a major software upgrade on Thursday.

The digital coin is being upgraded to stabilise transaction fees and significantly decrease the number of ether tokens available - which will in turn jack up the price of ethereum as there will be less supply and more demand.

Once news of the upgrade hit the market, ethereum surged a whopping 3.4 per cent on Thursday, with a coin costing $3,747.90.

Ethereum is the second biggest cryptocurrency after bitcoin, with a market capitalisation of $275 billion.

Some experts have warned that it could soon overtake major rival bitcoin following the update.

The Ethereum Improvement Proposal (EIP) 1559 upgrade gives miners transaction fees that are less volatile and more predictable, according to Coin Desk.

However, what really caused ethereum’s hike in price was because it has begun “burning” a small amount of its tokens, which means they are taken out of circulation, permanently.

Following the upgrade, 539.29 ether tokens were “burned” by late Thursday, Reuters reported.

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Pankaj Balani, chief executive at derivatives trading platform Delta Exchange, believes that ethereum is going places.

“If bitcoin reclaims $40,000 (A$54,000) and manages to hold that then we can see Ether rally further and test the $3,000 (A$4000) mark,” he told Reuters.

The chief executive expects ether coins to eventually outperform bitcoin.

Ethereum has recovered remarkably well since it fell by more than 7 per cent late last month.

The massive drop came after Canadian entrepreneur Anthony Di Iorio, who co-founded the ethereum network, revealed he was quitting the crypto game for good.

Vitalik Buterin co-founded ethereum when he was just 20. Picture: David Paul Morris/Bloomberg

The change, known as the London Hard Fork software upgrade, has been highly anticipated by Ethereum traders.

It is known as that because it’s part of a few software upgrades called London.

It is known as a hard fork because anyone using ethereum will have to download London to remain connected to the network.

Coindesk reports that the upgrade will also delay ethereum’s “difficulty bomb” which will happen in December.

A difficulty bomb refers to the slowness of being able to mine ethereum.