The cryptocurrency is set to go through a number of major network upgrades this year as it transitions from its Proof-of-Work (PoW) to Proof-of-Stake (PoS) consensus mechanism. Proof-of-Work rewards miners for solving complex equations when creating blockchain consensus, but it is energy-intensive. One step along the way in making Ethereum less energy-intensive is the London Hard Fork update that aims to solve the cryptocurrency’s problem of high transaction fees on its network.
The London update in July, if implemented, will see a vast change in how Ethereum’s gas fees are calculated because of ‘Update Eip-1559’, first proposed by the cryptocurrency’s founder Vitalik Buterin in 2018.
Transaction fees on the Ethereum blockchain are currently very high which has been a noted obstacle to the wider uptake of the cryptocurrency.
Speaking to Express.co.uk, George from Cryptosrus said: “If 51 percent of Ethereum miners disagree then, unfortunately, a contentious hard fork will probably happen unless Vitalik and team decide to take Eip-1559 out.
“It won’t kill Ethereum but it’ll set it back quite a bit.
“But if the miners end up agreeing, this will be a big deal for Ethereum.
“Gas fees will be fairer, more consistent, and ethereum will be more deflationary.
“However this won’t solve their scaling issues or even high gas fees due to congestion.”
The update could see Ethereum have the same scarcity factor as bitcoin and allow it to compete as a store of value that financial institutions utilise.
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Amber Ghaddar, PhD, Founder AllianceBlock, in an interview with investing.com, said: “The main goal of the 1559 Ethereum improvement proposal, or the London fork, expected to kick off in July, is to change how users make transactions on Ethereum.
“We believe that it should be very positive for the price of ethereum.
“There’s hope the London fork coming in July is going to make ether a deflationary asset.
“Some ethereum is going to be burned making it more attractive as a store of wealth, allowing Ethereum to expand its target market.”
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Cryptocurrency expert George from Cryptosrus said the “EiP 1559 update could be contentious”.
He added: “This update is contentious as the base fee will not be given to the Ethereum miners anymore.
“Right now all fees, every single gas fee is given out to the miners.”
It is the miners who will be voting as to whether to accept the coming update.
Just last month ethereum miners made 2.53 revenue from base fees alone.