“Ethereum hard fork” is a worthy Ethereum event you guys should watch. People expect this event to help the world’s second-largest cryptocurrency continue to expand.
Ethereum’s newest hard fork update, nicknamed “London,” went live on the network at 12:34 UTC, at Block 12,965,000.
In addition to the current backward-incompatible hard fork, they also released five additional Ethereum Improvement Proposals. EIPs 1559, 3554, 3529, 3198, and 3541 are code updates with purpose of improving the user experience, value proposition, and other aspects of the Ethereum network.
What does this Ethereum event that you should watch make possible?
EIP-1559 aims to ensure that Ethereum transaction costs are predictable for consumers.
At the moment, network users must compete for the privilege of letting miners process their transactions. When the network is busy, costs will be significantly higher than when it is calm. Additionally, users will pay a base transaction cost that will be algorithmically available on how busy the network is. In addition, users will be able to see this price upfront as a result of the change.
Also, they will also be able to tip miners in order to expedite transaction processing. The tip will be available to miners, not the basic fee, which will be destroyed or “burned,” which is what has investors so thrilled. Because burning coins reduces supply, the current supply may become more valuable.
How will it affect Ethereum’s price?
Ben Edgington, an Ethereum developer at ConsenSys, told Markets Insider, “We don’t know exactly what the effect will be in terms of ether burnt until it’s implemented.”
“The highly anticipated Ethereum ‘London hard fork’ event will expose users to a more flexible and cheaper fee structure and create a slight burn effect, projected to make Ether deflationary,” Greg Waisman, co-founder, and chief operating officer of global payment network Mercury, told Coinbase.
“The currency has been on an upswing over the weekend, and we may see this simmering bullish sentiment propel the coin above $3,000 in the days/weeks after the update.”
Next year, Ethereum developers aim to completely rebuild the coin’s network. This is likely to have a negative influence on its pricing.
Things to keep an eye on this Ethereum event
A possible break in the chain
The London hard fork is thrilling, but it also entails dangers and forays into unknown terrain. Backward incompatible upgrades rely on the Ethereum network’s many distributed computers. If a substantial number of nodes run by means of exchanges, miners, and other network stakeholders do not update, the chain will split, and be harmful to block creation on Ethereum.
A miner using the most popular Ethereum software client, Geth, accepted an erroneous transaction that caused a brief chain split while testing the London hard fork on the Ropsten testnet. Ethereum developers and users have collaborated to guarantee that such a problem does not arise on the main network again. Stakeholders may utilize node monitoring services like forkmon to keep track on the Ethereum blockchain’s status and discover chain splits.
MEV and front-running
By “burning” the base transaction fee, miners lose money. Miners will have to rely on higher ether prices or extract more value through MEV to compensate for lost income.
Due to frequent transaction reordering, MEV has caused customers on decentralized exchanges to be “front-run” on trades, have transactions canceled, and incur increased transaction fees. Using the Flashbots Dashboard, keep a watch on how the value of total MEV harvested on impacted Ethereum.
The performance of the fee market
Ultimately, it’ll be interesting to see how effective the new Ethereum fee market is in bringing predictability to transaction cost estimates, as well as how much total ether supply is burned through base fees. Websites like Watch The Burn can keep track of this.
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