Source: iStock / Ivan-balvan
As part of the gradual transition to Ethereum 2.0 and a Proof-of-Stake (PoS) consensus mechanism, Ethereum (ETH) could be released on or around 4. The eagerly anticipated Ethereum Improvement Proposal (EIP) 1559 should revise the network’s monetary system.
Ethereum’s core developers have proposed a block of 12,965,000 for the mainnet activation of the London network upgrade, which they estimate will take place on August 4th (UTC time).
Yes, unless someone objects in the next 24 hours, London should land on August 4th.
– Tim Beiko | timbeiko.eth (@TimBeiko)
EIP-1559 is one of the changes to Ethereum that many are looking forward to, even if there was previously noisy, if minor, opposition to its implementation.
Why is it so important? It divides the transaction fee into two parts: the tip, which can be set by the user, and a base fee, which is burned. Some ETH supporters are finding that this fee burning will turn it into a deflationary crypto asset and make it a serious rival as a store of value for Bitcoin (BTC).
However, it’s important to note that there isn’t a straightforward answer here as to when exactly it might happen. As reported, this shift may not come as fast as some believe, as Ethereum will have to move fully to PoS before the deflationary aspect of EIP-1559 really kicks in inflation.
“ETH will not immediately become deflationary because proof-of-work mining will continue to generate net inflation until Ethereum switches to proof-of-stake this year,” developer Ryan Berckmans recently told Cryptonews.com.
It’s also not intended to cut fees, although many have claimed. “When [ETH] the price goes up [transaction fees] are [gonna] be go waaaay up, “claimed MyCrypto founder Taylor Monahan. According to developer James Hancock, EIP-1559 reduces overpaid transaction fees, but not fees.
In either case, however, this is not the only EIP in the London package. This also includes:
- EIP-3529, which helps to offset some of the additional block size variance introduced by EIP-1559, which allows the block to be used up to twice the current gas limit;
- EIP-3541, which paves the way for broader improvements to the Ethereum Virtual Machine (EVM);
- EIP-3554, which moves the difficulty bomb, also known as the Ice Age, to December 1st.
Developers began testing the London upgrade (previously scheduled for July) on the Ropsten testnet on June 24th, but ETH users were again encouraged to “adjust expectations”. For example, on billing issues, Monahan stressed that users have no “reasonable assurance” of neither the final cost nor the time period in which what they have sent will be successfully delivered (or whether it will be).
At 09:19 UTC, ETH is trading at USD 2,377 and is up 3% in one day and nearly 10% in a week, reducing its monthly losses to 12%.
– What EIP 1559 brings to the Ethereum table
– ETH becomes ‘unlikely’ to become the ‘people’s currency’ but can still compete with BTC
– Ethereum miners can switch to these coins and increase their values
– Ethereum has to work harder to maintain its dominance in a multichain future
– Why Ethereum Is Far From “Ultrasonic Money”
– The Ethereum Economy is a house of cards
– “Fiat-like” proof-of-stake chains favor centralization and rich players
– Ethereum will not hide from quantum computers behind the PoS shield