What is London Hard Fork Ethereum? [EIP, EIP-1559, EIP-3238]

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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 London update for Ethereum is for the hard hook that introduced two new Ethereum Improvement Proposals (EIP). With the premiere of Ethereum 2.0 (Serenity) scheduled for 2022, the London update prepares the network for the transition to the Proof of Stake model. Miners will see a slowdown in growth in the mining crisis, which is expected to coincide with Serenity. Because London is a hard hook, all nodes must start following new rules and the latest version to continue mining and validation.
The most significant change will affect operating fees, including a new deflationary mechanism. In the past, users offered for gas prices. The miners preferred transactions based on payments added to them and used them as a reward to add blocks. Now each block will have a fixed, associated fee. This change is the result of EIP-1559, which was included in the London Update with EIP-3238.

Ethereum Improvement Proposal (EIP) are technical features that define the new features of the Ethereum blockchain. Developers create their own proposals and take into account community suggestions. Anyone can prepare a draft EIP and submit it for discussion, and the public can accept it. Each EIP follows the guidelines set out in EIP1: The EIP must include a brief technical specification of the function and a justification for that function. The author of the EIP is responsible for building consensus within the community and documenting dissent.

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.

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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.

EIP-1559 offers a new one evaluation mechanism operation you will create principal payment for each block. Blockchain will burn the fee by reducing the total Ether (ETH) supply. This effect will create deflationary pressure on the cryptocurrency.

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.

You can also add a tip for miners as an incentive to queue for your transaction. However, Ethereum will try to keep the blocks about 50% full even without tips. Since there is a lot of space in each block, the tip is likely to be too small to move operations to the top of the line.

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.

However, the blockchain will reach this level very soon. Network authenticators will delay the EIP-3238 clock bomb to ensure that the Proof of Stake Ethereum 2.0 consensus model is encouraged in the future.
Without this, miners have a chance to continue using Ethereum 1.0, similar to the split seen with Ethereum and Ethereum Classic. The delay in the hourly bomb will cause a 30-second ice age for the blocks in the second quarter of 2022. At this point, the combination of Ethereum 1.0 and Ethereum 2.0 must be completed.

When it comes to improving the network under the pseudonym London, there is a mixed feeling around it, mainly in terms of operating fees. As miners prepare to complete proof of work with Ethereum 2.0, this update significantly changes the fees miners receive. This reduction has the potential to reduce miners’ profits. Another concern is that Ethereum mining may become more centralized. Some argue that only the largest miners with the lowest energy costs will be able to continue to operate profitably.

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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