Ethereum’s EIP-1559: What You Need To Know Before its Release in the Upcoming Days

0
77
Ethereum's EIP-1559: What You Need To Know Before its Release in the Upcoming Days
Ethereum's EIP-1559: What You Need To Know Before its Release in the Upcoming Days

As soon as the miner reaches block # 12,965,000 Ethereum is forked. The block will arrive around August 4th or 5th. At press time, the Ethereum blockchain remains on block 129,512,300, which means there are fewer than 20,000 blocks on the network before the London hard fork.

What is EIP-1559 and How is Going to Change Ethereum?

EIP-1559 or Ethereum Improvement Proposal 1559 aims to improve the blockchain’s fee mechanism. The new proposal will remove the auction as the main gas cost calculation. Currently, users are offering some cash for their transactions that are processed by the Ethereum blockchain. The principle now applied can be described simply as “the more you pay, the faster the transaction”.

The new proposal completely changes the way transactions are processed on the network by increasing the basic rewards for miners. This allows users to have a more stable fee structure on the network and pay less for transactions.

How will the Hard Fork Affect the Price of Ethereum?

There is no answer to this question. From one perspective, the introduction of the basic fees will result in more ETH being burned over time. On the flip side, however, miners will receive fewer rewards, making the future of Ethereum questionable.

We cannot deny that the deflationary effect can drive currency prices higher due to dwindling supply. The hard fork is most likely to happen on August 5th. For now, ETH price is not responding to the news in any way, it just follows general market sentiment.

Binance Suspends ETH Withdrawal 

With the announcement by Binance that it will suspend deposits and withdrawals of ETH and ERC-20 tokens on August 5, 2021, at 11:45 a.m. (UTC), the cryptocurrency exchanges have started to prepare for the upcoming London hard fork. The developers behind the project announced that traders who hold ETH in online wallets or exchange wallets will not be affected by the upgrade and will not need to take any action.