Ethereum London hard fork and how it works

When people are impressed with certain cryptocurrencies, they tend to fork something new out of them. Among those that are currently being talked about in the market is the Ethereum London Fork which has several promises for its users. 

People have grown fond of cryptocurrencies and how they can be used in day-to-day life. With its impressive value and features, more users are now active when it comes to checking the crypto market to see which ones are performing well. Aside from Bitcoin, the other well-established coin is Ethereum. 

With its popularity and practicality, many people were interested in creating hard forks on its blockchain in the same way that there are several BTC forks. Based on the latest crypto news, several people are talking about the Ethereum London hard fork and what it is. 

What are hard forks? 

Before knowing what the new Ethereum hard fork is all about, users should first have a better understanding of what hard forks are. Technically speaking, hard forks are a radical change in the blockchain technology that invalidates the blocks and the transactions. These are often called backwards-incompatible upgrades. 

A hard fork in cryptocurrency is created when the nodes of a specific blockchain no longer accept the earlier versions of the blockchain because of new governing rules. Therefore, hard forks are a permanent divergence from where it was created. People can distinguish the hard fork from the one it was forked from through the new regulations that are stated in its code.

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What is the London hard fork? 

To answer the question ‘What is the London hard fork?’, it is a set of five Ethereum improvement proposals (EIPs). It was called such since the conferences of the developers were all held in London before the said project was finalized. The Ethereum London Hard Fork was created to work as an updated version of Ethereum that can work more smoothly. 

Each of the EIPs was made for different purposes. With that, here’s what people should know more about each EIP: 

• EIP-1559 → This is the most anticipated EIP as it is the largest change in the London hard fork. This introduces a base fee in the network block that will keep track of how much gas price will be taken from the transactions. With this, people will find it easier to estimate the fees. It also introduces a new transaction type where users can specify how much they are willing to pay.
• EIP-3541 → This EIP will make it impossible for new contracts that start with 0xEF to function without affecting the existing contracts.
• EIP-3554 → This increases the time needed to mine a new block network. However, it also reduces the incentive reward. Some people also call this as the difficulty time bomb. With this, miners are given no choice but to stop mining Ethereum 1.0 and start with Ethereum 2.0.
• EIP-3529 → This modification offsets the additional block size variance introduced by EIP-1559. This is also focused on the removal of gas refunds and reduction of refunds.
• EIP-3198 → This will make it possible for smart contracts to access base fee values on the blockchain, which can aid in providing fraud proofs and producing trustworthy derivatives for gas pricing.

With the help of ETH London hard fork, the Ethereum blockchain community can slowly switch the Ethereum blockchain from Proof-of-Work to Proof-of-Stake. This introduces the concept that those who hold more coins will have more power in the network. 

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How it will affect the Ethereum-Bitcoin equation 

Users who wish to learn more about London hard fork mining can find it a little harder than the usual mining process. The reason behind this is that this fork discourages people from mining Ethereum. Thus, allowing it to render at par with Bitcoin. 

Though it may seem a bit more complicated than how it used to be, investors may still appreciate how this innovation will take Ethereum to newer heights. In fact, some people were no longer surprised to handle changes in the network ever since it started to support non-fungible tokens and decentralized apps (dApps) which is something Bitcoin doesn’t have. 

What advantages does it bring? 

There are several advantages that people can enjoy by using this hard fork which was launched on London Fork ETH date August 2021. For those who have no clue about it yet, here are some of the advantages that this fork brings: 

• Improved transactions → The London hard fork enhances a user’s overall experience with ETH as it aims to improve transaction speed, reduce expensive gas fees, and burn unnecessary charges in the fees structure.
• Less congestion on the network → Congestion is one of the main problems that users encounter with ETH since there are several users at the same time, especially with the introduction of dApps. With this hard fork, all transactions will be simplified to reduce network congestion.
• Enhanced purchasing power →  With the help of EIP-1559, the number of circulating coins will be reduced. This will drive the price of ETH higher while still keeping it in demand and make ETH a deflationary asset like BTC. Thus, giving it a stronger purchasing power in the years to come.

For those who ask ‘Will London hard fork increase price?’ or ‘What’s in store for it in the future?’, the best thing to do is to keep on observing how Ethereum performs. Though this hard fork may have triggered different reactions from both users and experts, there is no doubt that the developers planned this project for the coin’s betterment. By trusting the creators and seeing how effective this change is, coin holders may be more open to other possible Ethereum changes in the future.    

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Words: Kyra Jimenez