The Ethereum blockchain received its long-awaited upgrade called “London” on Thursday, which brought a number of important changes with it. Kosala Hemchandra, the managing director and founder of MyEtherWallet, considers two changes to be particularly decisive.
“The London upgrade made about five major changes to the Ethereum network, but I think only two of them are really important to users,” Hemchandra said in a comment for Cointelegraph. He sees the “postponement of the time bomb” as the first important change. The expert explains:
“Since the introduction of Ethereum, a certain value has been built into the programming code, which should enable the future switch to ETH 2.0 or the Proof-Of-Stake (PoS) consensus procedure. This value is set in such a way that after a certain time or from a certain block the mininig difficulty increases exponentially, so that it becomes impossible for miners to generate further blocks and they inevitably have to switch to ETH 2 However, there were repeated delays in development, this value is pushed back further and further. The London hard fork has now made the last such shift. “
With increasing popularity, the Ethereum network is increasingly facing the problem of scalability, which is particularly evident in the fact that the hype surrounding decentralized financial services (DeFi), which are largely based on Ethereum, have risen the network’s transaction fees to astronomical heights . Ethereum 2.0 (Eth2) is intended to solve this problem and make the blockchain scalable by switching from the Proof-Of-Work (PoW) consensus procedure to the PoS consensus procedure. The starting shot for this lengthy process was given in December 2020.
According to Hemchandra, EIP-1559 is the second important improvement among the five major “Ethereum Improvement Proposals (EIPs)” introduced by London, as it gives the associated cryptocurrency Ether (ETH) a “deflationary” character.
“The EIP-1559 is a hot topic because it fundamentally changes the way Ethereum’s transaction fees work,” said the expert. And further:
“This brings with it serious innovations, for example part of the transaction fees will be burned in the future, which will gradually reduce the amount in circulation or the amount offered by ETH. However, since the miners are no longer paid with transaction fees anyway, this change is very controversial. In addition, the EIP enables a kind of tip to be issued directly to a miner, which in turn is not burned. “