What is Ethereum London Fork and How Does it Affect You?
EIP 3554 delays the “difficulty bomb” that is coded to make mining more difficult, essentially “freezing” it in preparation for Ethereum’s transition away from a proof of work model. Also called the “Ice Age,” the difficulty bomb is intended to disincentivize miners from using proof of work once Ethereum 2.0 is ready by making block rewards much harder to come by. EIP 3354 pushes the Ice Age back to Dec. 1, hinting that the merge with Ethereum 2.0 may happen at the end of the year. This is the fourth time that the difficulty bomb has been delayed, and unless the network is finally ready to move to proof of stake by the end of the year, it’s likely to be delayed once again in yet another network upgrade. Proposed originally in 2018 by Ethereum co-founder Vitalik Buterin, EIP 1559 went live on Thursday, August 5, 2021, with block 12,965,000.
Ethereum London Hard Fork Is Now Live!
On the one hand, it will decrease inflationary pressure further but also cut miner’s rewards. This EIP will change the fee mechanics so that instead of a fee auction for transaction priority there will be base fees and Ethereum Hard Fork tips. Base fees will be burned while tips, which are optional, will keep going to miners. Proponents of the change claim in the long term this will further keep total supply of ETH from inflating and depreciating.
- With more DeFi applications and services mushrooming by the day, network congestion will only increase in the future.
- The update will also add a deflationary mechanism to Ether, making it more valuable in the long run.
- We will also discuss how the hard fork might affect transactions on the ether network.
- CYBAVO customers won’t need to take any steps to upgrade to the latest Ethereum protocol, as it will be done by our technical team.
- An Ethereum Improvement Proposal (EIP) is a standard way of introducing technical specifications of upgrades or new features in Ethereum’s development.
Will the Hard Fork Cause a Split in the Ethereum Blockchain?
Backward incompatible upgrades depend on the many distributed computers, also called “nodes,” connected to the Ethereum network to upgrade their software at the same time. If a large share of nodes run by exchanges, miners and other network stakeholders don’t upgrade, it may cause a chain split and disrupt block production on Ethereum. EIP 3529 reduces gas refunds, which were typically used to incentivize developers to reduce or delete unused smart contracts and addresses on Ethereum. However, “gas tokens” like Chi and GST2 gamed the system by taking up space on the network when gas fees were low and reaping the benefits by deleting their data when gas fees were high. Ethereum London hard fork promises to make life easier for users, but it has many miners seeing red. It will be interesting to see if the disgruntlement eventually leads to a split in the Ethereum blockchain, especially with the EIP-3554 deadline is looming on the horizon.
- The London hard fork aims to address that situation by simplifying transactions while reducing congestion.
- London hard fork is the 11th planned upgrade to the Proof-of-Work Ethereum network.
- Miners can still receive optional ‘inclusion fees’ from users, which is why they are referred to as “tips”.
- But given the drastic reduction in user base, some observers believe that a split might not be as profitable as it is being made out to be.
- While EIP 1559 does not promise lower transaction fees, it would still get a cap, unlike the current setup.
Read more about how the London hard fork upgrade will impact Ethereum
The entire crypto community is watching closely where the changes will take ETH. At the current stage, EIP-3541 won’t introduce a lot of change to the network. In the future, it can support modifications for new types of smart contracts. While ETH 2.0 still looms on the horizon, a heatedly discussed London hard fork is soon to hit the current mainnet. CYBAVO customers won’t need to take any steps to upgrade to the latest Ethereum protocol, as it will be done by our technical team. According to EIP-1, each upgrade must bring details on its technical specifications and its rationale.
EIP 3198 allows users to return the base fee “opcode,” which makes it easier for developers to call and use any given block’s base fee for decentralized application estimations and efficiency. This latest backward-incompatible hard fork also marked the rollout of five new Ethereum Improvement Proposals (EIPs). EIPs 1559, 3554, 3529, 3198 and 3541 are code upgrades that aim to improve the Ethereum network’s user experience, value proposition and more. The London hard fork aims to address that situation by simplifying transactions while reducing congestion. The update will also add a deflationary mechanism to Ether, making it more valuable in the long run. The EIP will also see Ethereum’s current definite block size become dynamic and elastic, allowing it to adjust based on the amount of traffic within the network.
Naturally, this has raised the hackles of many mining co-operatives, who believe it will only leave them with one revenue stream instead of two. So, as is clear from the previous section, London is the upcoming planned upgrade to the PoW Ethereum network. If you are using an Ethereum client like Parity or geth, make sure to update it. If you are using third-party software to interact with the Ethereum blockchain, check in with them for information on support of the fork.
