Ethereum London hard fork ready to commence
Ethereum – the world’s second largest crypto asset – is just hours away from a highly-anticipated network upgrade known as the London hard fork.
Ether markets have seen an impressive period of growth during the past two weeks, with many analysts speculating the price action has been influenced by community excitement ahead of the hard fork.
Vitalik Buterin’s brainchild has become a victim of its own success, becoming plagued by high gas-fees, slow transaction speeds, and increasing environmental impact as the network has grown beyond his wildest imagination.
London hard fork is thus a vital stepping stone for the network, ahead of the massive shift from proof-of-work (PoW) to Ethereum 2.0’s proof-of-stake (PoS) technology – aimed at saving the network from near paralysis.
A hard fork occurs when there is a major alteration to the protocol of a blockchain network that results in a divergent split between the old protocol and the newer version. In a hard fork, miners must choose whether to continue validating the old blockchain or the new one.
The London hard fork is the latest update, and will incorporate five new Ethereum Improvement Proposals (known as EIPs) – which are all temporary, until the permanent Ethereum 2.0 update.
What are the new Ethereum Improvement Proposals?
Matthijs de Vries, Co-Founder and CTO of AllianceBlock provided insight into how the new London Hard fork will impact the industry.
“The new transaction fee model is a big deal for Ethereum: it can further increase adoption as new users will have less trouble figuring out how to execute a transaction that won’t fail,” he said.
“It is yet to be seen if the burning mechanism will make ETH deflationary, but it is certainly a step in the right direction and will not hurt the price development of ETH on its own.”
EIP-1559: is a very exciting proposal for the introduction of a ‘base fee’ that will track gas fee prices across the entire Ethereum network in order to ensure accurate gas fee predictions for network users, while also introducing a deflationary measure that will burn transaction fees, and cap transactional and miner fees.
This EIP has stoked serious fire in the Ethereum mining community.
“Block size will be scaled depending on how congested the network is and transaction fees scale with it,” added Matthijs.
“The entirety of this fee gets burned (taking it out of circulation). This is new for Ethereum, as until now Ethereum has been inflationary.
“However, with this change comes also the possibility to tip the miner, an additional part on top of the fee that doesn’t get burned and will go directly to the miner.
“This sounds fair, but we must take into account that miners can prioritize transactions almost however they like, introducing more front-running opportunities for those that choose to tip the miners.
“It’s possible that miners will facilitate frontrunning a token swap by default if you don’t tip them high enough, leaving the question: when do you tip enough? That can become a dark rabbit hole compared to the transparency of the current transaction model in place.”