Less than 24 hours to the next Ethereum hard fork and the excitement surrounding the EIP-1559 protocol implementation.
There was a lot of excitement surrounding the arrival of the Ethereum London hard fork and now we are less than 24 hours away from the next Ethereum hard fork. The countdown tracker from Ethereum.org shows that the hard fork will be live in the next 24 hours from the time of this article. The ad on the website:
“The update is scheduled to go live on Ethereum in August 2021, in block 12,965,000. He will introduce EIP-1559, which reforms the transaction fee market, along with changes to how gas refunds are handled and the timing of the Ice Age. ”
There was also great excitement surrounding the implementation of the EIP-1559 protocol. Ethereum Enhancement Proposal 1559 will change the way the Ethereum blockchain handles transaction fee. It will also reduce blockchain inflation by partially burning ETH as a gas charge. Thus, it aims to make the Ethereum network deflationary over time.
With the implementation of EIP-1559, each transaction will burn a base rate while decreasing ETH’s circulating supply. It also gives users the option to include a professional tip to encourage faster confirmations. Twitter user Korpi explained why EIP-1559 is optimistic for Ethereum’s blockchain network. In a myth-breaking topic, Korpi explains:
“It (EIP-1559) doesn’t reduce gas rates in the long run because it’s not a scalability improvement. However, it can help users not overpay for transactions due to a better rate estimation process. It also smoothes gas prices between blocks, thanks to variable block sizes.”
EIP-1559 is scheduled to go live this week and I still see a lot of wrong takes on its impact. Remember:
— korpi (@korpi87) August 2, 2021
Despite burning off partial transaction fees and removing ETH from circulation, this does not immediately make ETH a deflationary asset. For this, the ETH burn rate must be greater than the ETH issued in block rewards.
Ethereum miners face unpleasant situation with London Hard Fork.
The hard fork Ethereum London is the first step towards implementing Ethereum 2.0. This year, Ethereum miners enjoyed a big time with a huge surge in online activity led by DeFi and NFTs. Thus, mining revenue has been an important source of income for ETH’s miners.
But now this is going to change very soon! Certainly, miners can become validators on the PoS Ethereum blockchain, they will have to reserve large losses for expensive equipment purchased. However, there is a way for users to tip miners for urgent transactions, but it will only be a fraction of the gas fee. CoinDesk wrote:
“Instead of pocketing 100% of transaction fees, miners will only receive tips from users through an optional ‘inclusion fee’, paid electively by users seeking priority for their transactions.”
Post hard fork London, even if the transaction fee doesn’t go to the miners, users will still have to pay for it. The fee will go to an inaccessible cryptocurrency wallet used for ETH recording.