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Ethereum blockchain upgrade: transactions will be standardized

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Ethereum (ETH) carried out one of the biggest updates in years on August 5th. The update, also known as the “London upgrade”, was “eagerly awaited by the community”, according to the managing director of the Stuttgart Stock Exchange.

D.he London upgrade is intended to finally unify the cost structure for transactions on the Ethereum blockchain. The update is also considered to pave the way for the new “Proof-of-Stake” validation procedure, which is expected to be introduced with the Ethereum 2.0 update in the coming year.

Miners lose their importance after an update

The update fundamentally changes the fee model of the Ethereum network. So far, the miners who are responsible for transaction processing and validation of the blockchain held a central position in the Ethereum cosmos. Blockchain users had to pay an amount of ether set by the miners as a fee for transactions. If the network was busy due to many transactions, the fees set by the miners also shot up, sometimes sharply. That is changing now. In the future, an algorithm will set a basic fee so that the transaction costs will be uniform and therefore more transparent.

Ethereum remains an important network for the DeFi sector

According to the Stuttgart Stock Exchange (website) Thanks to the update, Ethereum is likely to remain one of the most widely used digital assets on the market in the future. After all, some of the most important applications in the crypto sector are based on the Ethereum blockchain. Almost all providers in the DeFi sector (decentralized finance) would use the network for their applications.

These are usually blockchain-based financial products with classic fields of application such as loans, bonds or interest. “

The applications run decentralized and automated, intermediaries are usually not necessary. The DeFi sector is becoming more and more important in the crypto sector: At the beginning of August, assets worth the equivalent of almost 73 billion USD were in circulation, the number of users and applications is rising steadily. Since the majority of these applications are processed via the Ethereum network, the recently carried out London update could lead to further growth at DeFi.ft

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Hasan Sheikh
Hasan, who loves technology and games, is studying Computer Engineering at Delhi JNU. He has been writing technology news since 2016.


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