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  • Home>Ether price recovers after coding freeze; bitcoin tests fresh highs

    Ether price recovers after coding freeze; bitcoin tests fresh highs

    Ether price recovers after coding freeze; bitcoin tests fresh highs

    11/08/2017

    By Mark DeCambre, MarketWatch

    Ether tokens rise about 2% at $300

    The No. 2 most popular cryptocurrency saw its price recover somewhat on Wednesday following a coding error that resulted in investors being locked out of a valuable clutch of Ether tokens. Meanwhile, bitcoin tested new heights as it has bounced around ahead of a so-called hard fork next week.

    A single Ether token, trading on the Ethereum blockchain, was most recently up 1.8% around $300, after touching a Tuesday intrasession low at $291, according to research and data site CoinDesk.com (https://www.coindesk.com/), following reports that wallets run by Parity Technologies said a user "accidentally" triggered a vulnerability in recent coding upgrade that resulting in that user becoming the sole owner (http://www.marketwatch.com/story/hundreds-of-millions-of-dollars-in-ethereum-frozen-in-accidental-coding-mistake-2017-11-07)of a group of wallets totaling between $150 million and $300 million.

    In an interview with CoinDesk (https://www.coindesk.com/ethereum-security-lead-hard-fork-required-to-release-frozen-parity-funds/), Martin Holst Swende, head of security for the Ethereum Foundation, said that a split in the Ethereum blockchain may be the only viable solution to recovery the lost funds. A split would result in another version of Ether being created, similar to one that occurred last year when hackers exploited a security weakness to steal more than 3.5 million Ether tokens (http://www.marketwatch.com/story/digital-currency-ethereum-nose-dives-after-40-million-hack-2016-06-17)from an organization called the DAO.

    In this case, no funds have been stolen but they cannot be access by their owners unless programmers roll back Ethereum's software to grant access the previously frozen Ether assets.

    In any case, the unintended hack highlights one of the biggest criticisms of cryptocurrencies, which are cryptographically coded currencies. Detractors argue that the cryptocurrenicies are susceptible to digital hacks that can undermine confidence in the nascent industry that is already viewed as a haven for money launderers and has been declared by Wall Street luminaries like Jamie Dimon, chief executive of J.P. Morgan Chase & Co. (JPM), as "a bubble (http://www.marketwatch.com/story/dimon-calls-bitcoin-a-fraud-and-may-have-delivered-the-biggest-blow-to-the-digital-currency-2017-09-12)" on the scale of the textbook, 17th-century tulip mania (http://www.bbc.com/culture/story/20160419-tulip-mania-the-flowers-that-cost-more-than-houses).

    A hard fork, where another version of an existing cybercurrency is cryptographically minted, can provide incentives for buyers to purchase the core asset in the hopes of collecting the newer version as a sort of dividend.