Ethereum — the second-biggest cryptocurrency and one that\u2019s home to many new financial applications — is getting a face-lift, one that could potentially boost the coin\u2019s price.<\/p>\n
Ethereum will soon undergo a major software upgrade, code named London, that will trim the pace at which the supply of Ether tokens grows. A change called EIP-1559 will split up the roughly 13,000 new Ethers issued each day for miner payment \u201cgas fees\u201d into three parts. One of these, the minimal or base fee that users pay to process transactions, will now be removed from circulation in a process known as burning.<\/p>\n
\u201cThe London upgrade is one of the most interesting and important upgrades in the history of Ethereum,\u201d said Kyle Samani, co-founder of investment firm Multicoin Capital, which holds Ether, citing the reduction of the coin\u2019s supply as a path to higher prices through increased scarcity.<\/p>\n
User base fees now account for somewhere between 25% to 75% of the gas fees paid to miners, Tim Beiko, the coordinator for the core Ethereum developers, said in an interview. Once these coins are burned, Ether\u2019s current supply increases of roughly 4% a year will be reduced.<\/p>\n
The supply could drop further once Ethereum moves to a different mechanism of verifying transactions, probably in the first quarter of next year. This new verification system will use computers supporting the Ethereum network to stake Ether coins instead of miners in most cases. The amount of new coins issued will slow, which could increase the price, Beiko said.<\/p>\n
The London upgrade, which will take place on Aug. 4 or 5, depending on when the system reaches the point on the blockchain where the update is scheduled, will also benefit Ethereum users by making user fees more predictable and reduce delays in processing most transactions, Beiko said.<\/p>\n
\u201cIt\u2019s just going to make the overall user experience better, because, in theory, there should be fewer failed transactions,\u201d Katie Talati, vice president of research at Arca, a crypto asset-management firm, said in an interview.<\/p>\n
While the London upgrade will create an initial revenue hit for miners supporting the network, over time they should still benefit as the value of their Ether holdings grows, Beiko said.<\/p>\n
\u201cIf the Ethereum ecosystem becomes stronger and larger, we will of course benefit from that, just like ordinary users,\u201d said Slava Karpenko, chief technology officer at 2miners, an Ether mining pool. And miners will still be able to earn coins by helping traders execute transactions such as arbitrage trades.<\/p>\n
While some miners might not go along with the upgrade and create a separate version of Ethereum — a so-called fork — that\u2019s unlikely to gain a lot of traction.<\/p>\n
\u201cAt the end of the day the miners are going to have to follow the users, because they are the ones paying the fees,\u201d Talati said.<\/p>\n
What\u2019s more, London contains code that will deploy a \u201cdifficulty bomb\u201d in December, which can make the coin impossible to mine without using a software upgrade.<\/p>\n
The upgrade is happening just as Ethereum celebrates six years since the software\u2019s initial release. The network now supports many popular and fast-growing decentralized-finance apps holding more than $66 billion that allow people to trade, lend and borrow coins peer to peer, without intermediaries like banks, according to DeFi Pulse.<\/p>\n
Even after a price rally during the past 10 days, Ethereum\u2019s $271 billion market cap is still nearly half of what it was in May, when Ether hit its all-time high. Most cryptocurrencies have been sliding in recent months due to factors such as tightening government regulations.<\/p>\n
Ethereum — the second-biggest cryptocurrency and one that\u2019s home to many new financial applications — is getting a face-lift, one that could potentially boost the coin\u2019s price.<\/p>\n","protected":false},"author":341034,"featured_media":395655,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[44696],"tags":[187,42124],"class_list":["post-408062","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency","tag-bitcoin","tag-ethereum"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/408062"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341034"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=408062"}],"version-history":[{"count":0,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/408062\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/395655"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=408062"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=408062"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=408062"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}