Crypto & Us : Bite 27 (London Hard Fork)

The most anticipated event for the year in the world of cryptocurrencies happened yesterday. The London Hard Fork upgrade on the Ethereum blockchain. The upgrade is the most significant upgrade on the blockchain which will make ethereum a deflationary asset. Let’s learn how!

1. EIP-1559 or the London Hard Fork is a curtain-raiser that has set the stage for Ethereum 2.0. It is said to improve a lot of drawbacks of ethereum. The value of ethereum shot up to $2,800 on this news and this is just the start. The upgrade focuses on improving the transaction fees calculation thereby making them less volatile.
2. With the successful implementation of the EIP-1559, all the fees in ETH which was being paid to the miners will now be burnt or will be lost forever. As per the current calculations, approx 4 to 6 ETH will be burnt every minute or approx 3 million ETH will be burnt every year. This will lead to a slow supply crisis thereby putting deflationary pressure on it and eventually lead to a significant increase in ETH’s prices.
3. The upgrade removes miners from the equation where they used to be rewarded in ETH to keep the system running. With the current upgrade, Validators will be introduced who will be validating the transactions and bring with them, more speed and efficiency. This will lead to faster transactions at lower and more stable gas fees. This will shift ethereum from the traditional Proof of Work (PoW) to the more sophisticated Proof of Stake (PoS) model.
4. The upgrade has drawn a lot of attention of the cryptocurrency Moghuls and institutional investors with some of them giving a wild prediction of 1 ETH touch $10,000 by the end of 2021. However absurd this might sound, analysts think it is a sensible prediction considering the recent global interest and investment in cryptocurrencies and with the latest upgrade, it makes ethereum even more lucrative than bitcoin considering the current scenario.
5. Overall, the lower transaction fees due to this update are set to benefit a lot of NFT creators and more than 3000 dApps on the ethereum blockchain. The only controversial part is the loss of fees for the miners. Since the entire process will be completed by December 2021, the miners have a few months to put their house in order.

The long-term view of the upgrade is definitely bullish. EIP-1559 has set the tone for the years to come, making ETH a hot asset again and giving it the edge against the other competitors. Now might be the last chance to buy some ETH under $3,000. Don’t miss out on it!