The upcoming Ethereum London hard fork is expected today August 4. Here’s everything you need to know to understand what this update brings to the web and why some in the community are skeptical.
August 4, 2021, | AtoZ Markets – The Ethereum London hard fork is expected to arrive on Wednesday, August 4. As with previous updates, there is already hype in the community. This is the next step for the network that is preparing for the monumental transition from Proof-of-Work (POW) consensus to Proof-of-Stake (POS) with Ethereum 2.0. The entire network will make a public shift sometime in 2022.
However, not all updates went as planned. The network experienced several problems and failures during the release of test networks, which resulted in increased skepticism around new additions.
Despite the delays, this complete overhaul of the system will result in the ability to calculate more transactions per second and reduce gas bills.
Getting ready for Ethereum London hard fork
As with previous updates, the Ethereum London hard fork includes a series of improvement proposals, otherwise known as the EIP.
The latter update consists of five EIPs centered around different types of fees (gas costs and returns), transaction speed, and increasing transaction volume through scalability.
Between London and its predecessor Berlin, the network launched test networks for developers to continue their transition to POS. While all of these hard forks are temporary pending the release of ETH2.0, they are critical to preparing miners, developers, and other members of the community for the permanent changes to come.
The most important common element of the Berlin hard fork and the subsequent test networks is EIP 1559. This improvement proposal concerns in particular the transaction fees. High fees are one of the hot topics in the move to POS, especially with increased network activity due to NFT.
London EIP for a more efficient Ethereum
As previously stated, these temporary hard forks are in preparation for what is to come with ETH2.0. Nevertheless, these are exciting times for the community as it is initially getting involved in the new way Ethereum works.
Here is the EIP that comes with Ethereum London hard fork:
EIP-1559: Change of the fee market for the ETH 1.0 chain
This is by far the most mediatized EIP and has developers focused on working on all the bugs. It introduces a “base charge” that affects all blocks throughout the network.
This base charge tracks gas prices across the network, making it easy to predict gas charges from wallets and users. It also allows you to set a maximum transaction and mining fee. The icing on the cake of this EIP is those transaction fees are about to be burned to improve the overall economy of the network.
EIP-3198: BASEFEE opcode
3198 accompanies the previous EIP as it adds an “opcode” to return the base charge value for the block where the transaction is performed. Such an improvement brings benefits to people who create smart on-chain contracts.
EIP-3529: Reduce Number of Returns
The returns on the Ethereum network were initially introduced as an incentive for developers to restore a clean sheet if and when possible. However, in fact, the opposite happened. This EIP removes gas refunds from SELFDESTRUCT and reduces them for SSTORE. Overall, this suggestion will help compensate for the difference in block sizes introduced by 1559.
EIP-3541: Discarding new contracts starting with byte 0xEF
Simply put, this EIP allows you to implement new smart contracts that start with the 0xEF byte. This update will not affect those already existing.
And finally, the infamous bomb delay.
EIP-3554: Difficulty Bomb Delay until December 1, 2021.
This EIP delays the “Ice Age”, more formally referred to as the bomb of difficulty. This gives miners more time before freezing production during the final transition from POW to POS. Although delayed in the past, the transition is still not ready and hence another round.
Ethereum’s unstable growth
There is always a hype in the entire cryptocurrency space before any major network update. Cryptocurrency community members and influencers usually publicize upcoming changes, whether in Cardano, Ethereum, or Ripple.
As ETH2.0 is slowly becoming a reality this year, we are seeing a decline in community interaction. Obviously, the increase in traffic due to the NFT increased the demand for performance in transaction time and gas prices. Even so, at the peak of the frenzy, the network saw its lowest gas prices since late 2020.
This slump in gas prices came not long after the Berlin hard fork. What the Ethereum London upgrade will bring is very much expected.
On the other hand, another network collapse was not so welcome. In the run-up to the Ethereum London upgrade, ETH prices were low, hovering around $2,500. For the most part, $2,500 is a number the members of the ETH community gladly welcomed, though the prices terrified HODLers.
The upcoming Ethereum London hard fork will go live between 13:00 UTC and 17:00 UTC. As the time gets closer, miners and developers sometimes have different expectations for updates.
Miners are most concerned about the changes in the way they work today. As the network evolves, the mining rewards are one of the biggest unknowns. For those who have been in it for a long time, concerns are about the unpredictable decline and centralization of the mining process.
Meanwhile, developers are impatiently preparing for monumental changes. GitHub formally approved the Ethereum 2.0 chain merge proposal on July 22. This means that the first step to merge with ETH2.0 is officially underway.
With the introduction of the hard fork, the user base should consider its next move. For those who simply hold ETH on an exchange, internet wallet, or hardware wallet, nothing changes unless the operator in question advises otherwise. Miners should update the ETH client. They must manually change the target gas limit threshold.
The Ethereum London hard fork brings us all one step closer to the blockchain space run by POS. As these new developments become available, all eyes will be on the Ethereum network.
Will it be able to maintain its place in an ever-changing decentralized space? We’ll have to wait and see.
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