London Hard Fork Ethereum is a clock bomb for an update and difficulty level that changes the blockchain transaction fee model. The Ethereum network will set fixed operating fees with a base fee for each block in exchange for a gas price offer system. To keep up with the planned release of Ethereum 2.0, the developers are also delaying a deliberately set up event known as the trouble clock bomb. This will encourage miners to move from Work Proof (PoW) to Proof of Stake (PoS).
The article was originally written and published at Binance Academy
London Hard Fork Ethereum is an update to the Ethereum blockchain, which is expected to arrive shortly after the Berlin Hard Fork in April 2021. The London update introduces significant changes to the long-controversial Ethereum transaction fee system. This update prepares for the planned release of Ethereum 2.0 and improves the consensus model.
However, it is considered a controversial update due to some significant changes in the London operating fee system and the digging of this cryptocurrency. The exact impact of the changes on users and miners is not fully known, but due to the premiere of Ethereum 2.0, they are temporary.
The EIP author must follow a defined process before approving an EIP, including peer review and joint design. If the community agrees to the proposal, it can prepare it for release.
EIP-1559 is a proposed change to the way users pay for gas in the Ethereum network. This EIP was created by Ethereum founder Vitalik Buterin and a group of other developers.
Over time, the average fee paid by Ethereum users has risen sharply for small transactions. For example, if the network fee is around $ 20 (USD), sending $ 20 Ether (ETH) or another digital asset doesn’t make much sense. Such high fees have made the network less attractive, especially for beginners.
Basic payment varies for each block depending on network demand. If the block is full of more than 50% of transactions, principal payment will increase and vice versa. This mechanism tries to maintain a semi-complete level of balance for most blocks.
Built in Ethereum difficulty hour bombThis makes Ethereum’s mining business increasingly difficult. When the time bomb reaches the level of difficulty, the time required to mine a new block will be so long that the miners’ profitability will decline and operations will be very slow. The developers want to make sure that miners have no choice but to stop mining Ethereum 1.0 and switch to Ethereum 2.0 after launch.
Although we cannot be sure, deflationary mechanisms are expected to raise the price of ETH. Such an expectation may be due to the burning of Ethereum after the update base fees ETH of all blockchain transactions.
As with Bitcoin, the existing mechanism works similar to a tender. The more you pay in operating fees (or gas costs), the more likely it is that your trade will be quickly selected and approved by the miners. However, after the London update, you will not have to choose the price of the gas you pay for Ethereum transactions.
Instead, you will simply see principal payment and an advisory option for the miner. But principal payment may vary between the time the transaction was placed and the time it was added to the block. You can make an appointment to prevent this maximum payment, what do you want to pay. Where the miner blocks your operation principal payment less than payment limitnetwork difference will return to you.
London will be one of the most important updates we see when it comes to user interaction with Ethereum. Many of the previous updates have changed many systems that we don’t usually see when using Ethereum. Prices and trading times are now more likely to fall, but are still not guaranteed. However, the transition from PoS to Ethereum 2.0 is scheduled for 2022, so the implementation of the London Hard Fork is still limited in time and temporary.
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