On Monday (August 2nd), three days after Ethereum’s sixth birthday and three days before the London hard fork is due to go live on the mainnet, Ether’s price campaign continues to impress the crypto community.
Last Friday (July 30th) Ethereum celebrated its sixth birthday (as the mainnet went live on July 30th, 2015).
The original Ethereum white paper (entitled: “Ethereum White Paper: A Next Generation Smart Contract and Decentralized Application Platform”) was written by Russian-Canadian programmer Vitaly Dmitriyevich Buterin (better known as “Vitalik Buterin”) and posted on his blog published in December 2013.
Here’s how Vitalik described the main goal of Ethereum in the summary of this article:
“What Ethereum wants to offer is a blockchain with an integrated, full-fledged Turing-complete programming language that can be used to create ‘contracts’ that can be used to encode any state transition functions that allow users to do any of the described Creating systems above, as well as many others that we haven’t imagined yet, by simply writing the logic in a few lines of code. “
Ethereum was announced by Vitalik on January 27, 2014 on the second day of the North American Bitcoin Conference in Miami, Florida.
During his presentation, Vitalik said that one of the uses for Ethereum is to create cryptoassets for special purposes:
“Let’s not have a currency. Let’s have thousands of currencies. “
About six months later (on June 7, 2014) the eight co-founders of Ethereum ― Vitalik Buterin, Anthony Di Iorio, Charles Hoskinson, Mihai Alisie, Amir Chetrit, Joseph Lubin, Gavin Wood and Jeffrey Wilke met in a rented house in Zug, Switzerland (a city nicknamed “Crypto Valley”). At this meeting, Vitalik suggested that the Ethereum project be continued on a non-profit basis.
The development of Ethereum was financed from July to August 2014 via an Initial Coin Offering (ICO), whereby the participants paid for the Ether (ETH) token with Bitcoin (BTC). This ICO raised 3,700 BTC in the first 12 hours and raised $ 18 million in total.
The Ethereum Foundation’s last proof-of-concept prototype, code-named “Frontier”, went live on July 30, 2015.
The upcoming London hard fork, the most important part of which is EIP-1559, was originally supposed to go live on the ETH 1.0 Mainnet in July, as you can see from the following two Twitter posts (from February) by Ethereum advisor Ryan Berckmans.
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– EIP-1559 will most likely launch in July in the “London” hard fork
– Today there was an EIP-1559 community call with miners. It’s great to see a lot of different stakeholders on the call including miners advocating for EIP-1559 https://t.co/DewRgAMZje
– Ryan Berckmans (@RyanBerckmans) February 26, 2021
Here is a description of how Ethereum’s transaction pricing mechanism will work after EIP-1559 goes live:
“The proposal in this EIP is to start with a base rate that the protocol adjusts up and down based on the congestion on the network. If the network exceeds the target gas consumption per block, the basic fee increases slightly and if the target capacity is not reached, it decreases slightly.
“Since these changes to the basic fee are limited, the maximum difference in the basic fee from block to block can be foreseen. This then allows wallets to automatically set gas charges for users in a very reliable manner.
“It is expected that most users will not have to manually adjust gas charges even during times of high network activity. For most users, the basic fee is estimated from their wallet and a small priority fee that compensates miners who take an orphan risk (e.g. 1 nanoeth) is automatically set. Users can also manually set the maximum transaction fee to limit their overall costs.
“An important aspect of this fee system is that miners can only keep the priority fee. The base fee is always burned (i.e. it is destroyed by the protocol). This ensures that only ETH can be used for transactions on Ethereum, which solidifies the economic value of ETH within the Ethereum platform and reduces the risks associated with the Miner Extractable Value (MEV).
“In addition, this burn offsets the Ethereum inflation and continues to give the miners the block reward and the priority fee. Finally, it is important to ensure that the miner of a block does not receive the base fee, as this removes the incentive for the miner to manipulate the fee into charging more fees from users. “
The London hard fork is expected to go live on August 5th at 12:00 UTC on the Ethereum mainnnet at block height 12965000.
Early this morning, an Ethereum fan stated on Twitter that while EIP-1559 “doesn’t make $ ETH deflationary by default”, it is still “very bullish on $ ETH” and went on to explain why:
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What everyone is excited about is the burning of $ ETH. According to EIP-1559, part of the transaction fee is burned and withdrawn from circulation. But that doesn’t mean ETH will immediately become a deflationary asset. For this to happen, the ETH burned must be higher than the ETH spent in block rewards.
– korpi (@ korpi87) August 2, 2021
He / she then went on to say that Ethereum has fully completed its transition to a Proof-of-Stake (PoS) consensus mechanism (i.e. once “The Merge” has taken place, which is expected to take place in the first half of the year). 2022), then EIP-1559 should help ETH become a deflationary asset:
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Under the future PoS model, transaction fees of ~ 20 gwei would have to be maintained to offset the ETH expenditure. Then $ ETH really becomes a deflationary asset and it’s hard to imagine a scenario where this doesn’t happen. Pic.twitter.com/VyDVTvDBYI
– korpi (@ korpi87) August 2, 2021
Yesterday (August 1st) Simon Dedic, Co-Founder and Managing Partner at Moonrock Capital, a blockchain advisory and investment partnership based in London and Hamburg, “said the following about Ethereum’s latest price promotion:
A few hours later, Chris Burniske, a partner at crypto-focused venture capital firm Placeholder, said that ETH seems to be in much higher demand than BTC:
Then, earlier today, popular cryptocurrency analyst Michaël van de Poppe expressed his optimistic stance towards ETH by saying that he believes ETH will eventually flip BTC (i.e., its market capitalization will eventually exceed BTC).
According to data from TradingView, ETH-USD is currently trading on the Bitstamp crypto exchange (as of 16:27 UTC on the 2nd.
DISCLAIMER
The views and opinions of the author or the persons mentioned in this article are for informational purposes only and do not constitute financial, investment or other advice. Investing in or trading in crypto assets carries the risk of financial loss.
IMAGE CREDIT
Image by “elifxlite” via Pixabay
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