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The launch of Ethereum’s London hard fork has been the most anticipated event regarding Ethereum (ETH/USD) for months now, and it is finally here, happening this Thursday according to the project’s own countdown.
Ethereum.org says that the upgrade will go live once the chain reaches block 12,965,000, and it will introduce EIP-1559. The website explains that EIP-1559 will reform the transaction fee market, and introduce new changes to how gas refunds are being handled. On top of that, it will also introduce the Ice Age schedule.
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In other words, EIP-1559, or Ethereum Improvement Proposal 1559, will affect the way the network is handling fees. After the upgrade arrives, every following transaction will burn a base fee, thus reducing the circulating supply of the asset, and allowing users to choose whether or not they wish to add a tip that would help incentivize faster confirmations, proportionate to network demand.
Other EIPs will also be introduced via this same upgrade, although this one has been the most anticipated one, considering the height that ETH transaction fees have reached at certain points this year.
A few important details to remember
While the arrival of the London hard fork is definitely a game-changer for Etheruem, one Twitter user issued a warning, as they know how the community sometimes overlooks certain aspects of what is really going on in pursuit of an ideal solution.
Specifically, the user, calling themselves korpi, stressed that the upgrade will not make ETH deflationary by default. It will not reduce Ethereum’s supply by 90%, which is commonly referred to as triple halving. And, most importantly, it is still very bullish for Ethereum.
EIP-1559 is scheduled to go live this week and I still see a lot of wrong takes on its impact. Remember:
— korpi (@korpi87) August 2, 2021
– It doesn't make $ETH deflationary by default.
– It doesn't reduce $ETH supply by 90%, referred as "triple halving".
– It's still very bullish for $ETH.
Why? 🧵👇
The user explained that, for Ethereum to become an inflationary asset, the burned amount would have to be greater than block rewards, which is not something that should be expected to happen immediately.
In the end, the London hard fork, as big of a deal as it is, is only another step on Ethereum’s journey towards Ethereum 2.0 — it is by no means the last step. There is still a large amount of work to be done after its implementation. But, with that said, this move should certainly help with getting the gas fees under control, so its importance is by no means diminished in any way.