CDzExchange
Published in

CDzExchange

Ethereum London Hard Fork: What You Need to Know

Just right after the Berlin upgrade announcement in April, Ethereum announced the deployment of the London upgrade for June 24th. This is supposed to be the cooler one. Why? Because for starters, it would help facilitate Ethereum’s full transition from Proof-of-Work to a Proof-of-Stake (PoS) consensus mechanism.

Typically, this major upgrade will have a huge impact on Ethereum — and the surrounding crypto community.

Having already launched on the Ropsten and Goerli testnets, the London upgrade is also set to be deployed on Rinkeby and Kovan testnets in the coming weeks. This may be the reason the price of ETH hit a 2-week high since the last dip.

What’s in the upgrade?

Wondering why there’s so much hype around this new upgrade? Well the hype seems kinda worth it. While the London hard fork prepares users on the network for the Ethereum 2.0 (Serenity) release, it also makes notable changes to the transaction fee system on the network. The upgrade includes 5 Ethereum Improvement Proposals (EIPs) that introduces a new transaction fee structure. Sounds too technical? Stay with us.

High gas fees have always been a challenge with the Ethereum blockchain. Users especially in cases of small transactions had to pay exorbitant prices in gas fees. This favored whales who could afford such costly fees, leaving out the smaller minnows. If you’ve ever traded on Ethereum dapps, this should be something you’re definitely familiar with. You don’t wanna pay through your nose for a simple small transaction. The London upgrade aims to fix that

One of the newly introduced EIPs, EIP-1559 (fee market change), proposes an entirely new transaction pricing mechanism that allocates a fixed fee per block. Instead of bidding on gas prices as it currently stands, the network will set a base fee for each block to make the transaction speed equal for all users. Ethereum blockchain will burn the fees which in turn reduces the overall supply of ETH (burn baby, burn!).

Although you should note that, if you still want your transactions prioritized on the network, you can incentivize miners by giving a tip called priority fee.

In a bid to also get PoW miners and users to transition to the PoS mechanism, the London upgrade includes the EIP-3554 (Ethereum Difficulty Bomb) which has been delayed till December. This proposes to make mining on the current Ethereum blockchain much more difficult, time consuming and expensive. This will force users to make the necessary transition to ETH 2.0 that is undoubtedly much more environmentally friendly. The old mode is getting stale, everyone’s gotta hop on the upgrade.

What does this mean for me?

The current Ethereum mechanism is plagued with high gas fees. If you need your transaction processed faster, you often have to pay more gas fees to be made priority.

However, this new upgrade gives you equal access, where you don’t have to pay more for transactions to be validated. The base fee is fixed per block and that is what you pay at the time you submit the transaction. This should also prevent transactions from getting stuck as ETH 2.0 rolls out with larger scalability.

If all testnets launch successfully, we could be seeing the mainnet launch of the London upgrade later in August.

Reduction in transaction fees is one of the main highlights of this upgrade and we look forward to seeing how this is actually implemented. There’s tons more in terms of other upgrade features, so stay tuned for our coverage on Ethereum 2.0 news!

The Most Liquid DEX for Crypto Derivatives

Recommended from Medium

Zenodys Protocol specification and data format

Announcing the Next Staking Project — Spores + FRM Buyback

[Media] “What the Future of Wealth Management Will Look Like with Blockchain and Artificial…

START Listing!

Uniswap V3 is now live on Polygon

FATF Must Consider New Approach to Accomplish AML/CFT Goals

Blokchain + Music = ?$

Russian Blockchain professionals may expect to earn up to five times the national average pay.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
CDzExchange

CDzExchange

Cross-chain Crypto Derivatives Exchange

More from Medium

Danial Abrham: Hello everyone..

Mercuryo and Doppelgangers: Be Aware, Stay Aware

FEEDING THE STARVING ARTIST WITHOUT RESORTING TO CANNIBALISM (But Not Entirely Ruling It Out…

Redefining What It Means to Live | The 4-Hour Workweek