Today is a big day in the world of cryptocurrency! In particular, for Ethereum.
One of the most important and exciting updates in the history of Ethereum is happening today and will change things going forwards.
The upgrade, currently known as the London Hard Fork, also known as the Ethereum Improvement Proposal (EIP) 1559, aims to change the way transaction fees are estimated. The upgrade will also look at destroying coins.
With the current system for Ethereum, users must bid for the price they are willing to pay for their transaction to be picked up by a miner, so far, users have found this to be expensive. The new update will make this process automated, with a bidding system that has a set fee that will fluctuate based on how congested the network is.
So what do you need to know?
Crypto is well-known for being highly volatile. This update is aiming to improve this by making the market more predictable. This should hopefully encourage more users to invest by making the system easier and less risky.
The change will place more of the power back into the user's hands. By having a more controlled system users will have better information and insight into when the fees are high or low, giving them a chance to wait for the right time to buy.
Now, this doesn’t necessarily mean transaction fees will be cheaper overall. However, it should definitely ease some of the stress and confusion off of users looking to purchase or trade Ethereum.
Another significant change under the new upgrade is that part of every transaction fee will be burned, or removed from circulation. This should begin to reduce the supply of ether and will possibly increase its value.
Finally, whilst this upgrade is small in comparison to Ethereum 2.0 which is coming out early next year. It will be important to understand the 2.0 upgrade which will bring a change to the Ethereum Network.
The developers are working on scaling up the Ethereum network by adding more side networks and linking them. Ethereum investors are hoping that this will reduce congestion and transaction costs.
“I think the most important thing that EIP-1559 shows to investors is that Ethereum is still an actively developed project which refuses to stagnate and become obsolete,”
Eric Conner, a co-author of EIP-1559 and co-founder of EthHub
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