Investing.com - Cryptocurrencies rallied on Tuesday, as Ethereum was set to “fork” in an attempt to solve a mining issue.
Ethereum, the world’s second largest cryptocurrency by market cap, rising 3.42% to $557.23 on the Bitfinex exchange as of 8:53 AM ET (12:53 GMT).
The fork is an attempt to defuse a so-called “difficulty bomb” in the code of Ethereum. The change means that all users of the original blockchain will need to update their software but will disable a feature designed to make mining more difficult.
The feature was originally coded in as a way to switch from a Proof of Work, or a way to check against spam by asking for work, to a Proof of Stake concept, in which the creator of the next block is chosen randomly. The developers of Ethereum have decided o stick to Proof of Work for now.
Meanwhile other virtual currencies were up, despite regulation worries.
Bitcoin was trading at $7,418.90, rising 1.61% the Bitfinex exchange, not far from an earlier low of $7,467.00.
The digital currency was still down 10% over the week. Bitcoin had fallen to a a six-and-a-half week low after reports last week that the U.S. Justice Department is looking into whether traders are manipulating the price of Bitcoin and other virtual currencies.
As governments have increased regulation, digital currencies have fallen in value. The total market cap was at $323 billion at the time of writing, compared to $311 billion on Monday.
Other digital coins were up slightly, with Ripple, the third largest virtual currency, increasing 1.38% to $0.59343 while Litecoin was at $120.89, up 4.66%.
In other news, antivirus software founder and cryptocurrency advocate John McAfee hinted that he was launching a new type of fiat currency that is backed by digital currency.