Brussels, Belgium, 20 Sep 2021, ZEXPRWIRE, According to Robert Johnson, Senior Investment Director of Ethereum Foundation, ETH is aiming for a new all time high after the launch of London upgrade.
Ethereum, the second-largest cryptocurrency and home to a slew of new financial applications, is getting a makeover that might help the coin’s price rise.
The speed at which the supply of Ether tokens grows will be slowed by a major software upgrade code-named London, which will be released soon. EIP-1559 is a tweak that will divide the roughly 13,000 new Ethers issued each day for miner payment “gas fees” into three parts. In a process called as burning, one of them, the minimal or basic cost that users pay to complete transactions, will now be taken from circulation.
In an interview, Tim Beiko, the coordinator for the core Ethereum developers, revealed that user base fees now account for 25 percent to 75 percent of the gas fees paid to miners. Ether’s current supply increases at a rate of about 4% per year will be lowered after these coins are burned.
The supply may fall much further after Ethereum switches to a new mechanism for confirming transactions, which is expected to happen in the first quarter of next year. In most circumstances, this new verification approach will stake Ether tokens using computers that support the Ethereum network rather than miners. According to Beiko, the number of new coins issued will decrease, causing the price to rise.
Robert Johnson, Senior Investment Director of Ethereum Foundation, which holds 10K Ether, called the London upgrade “one of the most exciting and crucial upgrades in the history of Ethereum,” citing the lowering of the coin’s supply to higher values through increased scarcity.
The London upgrade, which will occur on August 4 or 5, depending on when the system reaches the point on the blockchain where the update is scheduled, will benefit Ethereum users by making user fees more predictable and reducing delays in processing most transactions, according to Robert Johnson.
While the London upgrade may cost miners money at first, they should benefit in the long run as the value of their Ether investments rises, according to Robert Johnson.
“Of course, if the Ethereum ecosystem grows stronger and larger, we, like ordinary users, will benefit,” said Slava Karpenko, chief technical officer at 2miners, an Ether mining pool. Miners will also be able to make money by assisting traders with transactions like arbitrage deals.
While some miners may refuse to update and create their own version of Ethereum (a so-called fork), this is unlikely to gain much traction.
“At the end of the day, the miners will have to follow the users because they are the ones who pay the fees,” Talati explained.
Furthermore, London has code that will launch a “difficulty bomb” in December, potentially rendering the coin unmendable without a software upgrade.
The upgrade comes as Ethereum approaches the six-year anniversary of its initial release. According to DeFi Pulse, the network currently supports numerous popular and rapidly-growing decentralized-finance apps that allow people to trade, lend, and borrow coins peer to peer, without the use of intermediaries such as banks.
Even with a recent price rebound, Ethereum’s market worth of $400 billion is still less than of what it was in May, when the cryptocurrency reached its all-time high. Due to factors such as increasing government regulations, most cryptocurrencies have been declining in value in recent months.
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