Ethereum London Hard Fork upgrade: Much-hyped EIP 1559 or the “London hard fork” upgrade was implemented on Ethereum network today. The data from Etherscan now shows that block 12,963,799 has been added to the network. This article explores what the “London” hard fork upgrade means for the network and how it may impact Ethereum token prices and investors.
But first, take a look at what is a fork?
Blockchain networks such as Ethereum have a community. This community agrees or disagrees with a change in the network. It is often done to ensure that the network functions as smoothly as possible. In some cases, these hard forks are implemented to protect the network against potential harm.
London Hard Fork upgrade is said to be a prelude to the major upgrade ‘Serenity’ or ETH 2.0, which is slated to arrive by the end of 2021, or may be early next year. Serenity will likely switch Ethereum from a Proof-of-Work blockchain to a Proof-of Stake blockchain.
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According to Edul Patel, CEO & Co-founder of Mudrex, the Ethereum community agreed that there were some issues with the existing blockchain. That is when the London Hard Fork upgrade came into the picture.
How will London Hard Fork upgrade help?
The London Hard Fork upgrade is said to improve many drawbacks of the Ethereum blockchain. Such as:
1. Change unpredictability
“One of the biggest problems with the Ethereum network is the unpredictable volatility of transaction costs. These transaction costs are also known as ‘gas prices.’ During network congestion times, these gas prices could range to a few hundred dollars. With the latest upgrade, this unpredictability would change,” Patel told FE Online.
2. Pathway to ETH 2.0
Another major drawback to the Ethereum blockchain is the infinite supply of the ETH token. That causes a perpetual problem of inflation for Ethereum. It is going to change after ETH 2.0 goes live later this year.
Patel said the London Hard Fork upgrade creates a pathway for the transition from the current system to ETH 2.0.
Why hard fork upgrades are implemented?
The hard fork upgrades are implemented to make the blockchain more efficient.
With the latest upgrade, Patel said, “Ethereum will continue being the most preferred network for decentralized finance or DeFi. Several analysts claim that DeFi would bridge the gap between mainstream finance and cryptocurrencies. It would ultimately push demand for the ETH token higher, thereby pushing the token’s price higher. Long term impact of the London Hard Fork upgrade appears to be very bullish for Ethereum.”