The EIP-1559 hard fork is hours away and it could make the ETH prices go higher and transactions easier but what could go wrong? Let’s find out in our latest ethereum news today.
The EIP-1559 hard fork is scheduled for today, August 5 and we will see the code change altering the transaction fees structure on Ethereum. The network is getting an upgrade as five ETH improvement proposals are getting incorporated into the Blockchain’s code. The most-talked change is the EIP-1559 of the London Hard fork as it will do a number of things while trying to stop transactions from building up on the network and make it clearer to the ETH users how much they will have to pay in gas fees to push the transactions in a timely manner.
For months now, users were looking for this upgrade as a booster for the ETH prices and to make the fees lower. The upgrade is huge enough that most warn that it wouldn’t be a straight shot from point A to point B. The developers will be on the lookout for hitches to the network’s consensus mechanism while other users double-check the price of the transactions. Taylor Monahan who is the CEO of MyCrypto wallet provider said:
“Hard forks are big, fundamental, breaking changes by definition. Things can go wrong on multiple levels.”
EIP-1559’s mechanism for reducing the congestion is doubling the capacity of the block added to the chain and replaces the current auction-based fee structure with the automated base fee. This should help alleviate the bunch of failed transactions that cost users of NFT platforms and decentralized lending protocols built on Ethereum, thousands of dollars for underestimating the gas they will need. The upshot according to developer Tim Beiko said:
“As long as a transaction is sent with a fee higher than the BASE FEE and includes a tip for the miner, it will be included in the next handful of blocks.”
🇬🇧⛏ London Mining Misconceptions Thread ⛏🇬🇧
Over the past day or so, I've received a bunch of questions/seen concerns about London activating for miners, so hoping to clear a few things out here 😁
— Tim Beiko | timbeiko.eth ☀️ (@TimBeiko) August 4, 2021
The contentious part is where the base fee goes. It is not to the miners and it is burned which means the rate at which ETH supply is growing will slow down. While each mined block will fetch a miner 2 newly minted ETH, the network will take a fraction of an ETH out of circulation so, in a case of high congestion, more eth will be burned than created. The deflationary pressure will be good for investors that are long Ethereum and the less of something exists, the higher the price of the thing right?
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