Ethereum Improvement Protocol or EIP-1559 went live on Thursday 5/8/21, with Vitalik Buterin considering it to be the most important part of the London hard fork.
Now it gets much easier to send a transaction that will get included in the next block, and that’s very important to user experience.
So what does EIP-1559 mean and what are the implications?
- It promises to decrease price volatility in relation to transactions by introducing a base fee.
- This base fee will be burnt rather than put in the hands of miners.
- Roughly 2.4 ETH is being burnt per minute.
- It is a step closer to Ethereum adopting the Proof of Stake (PoS) mechanism of mining blocks.
For investors, the burning of ETH could lead to a large increase in value. Positive sentiment is already visible, with a 3.5% price jump in the last 24 hours.
For miners, a network split could possibly occur if they reject the upgrade; however, this is unlikely to be supported by larger players, leaving miners with few options.
Only a short time into the upgrade, it is too early to tell what will happen over the coming weeks and months, but as the ETH 2.0 rollout continues, the Minerall team is working overtime to make sure all changes run smoothly. We have tested our new node that connects to Ethereum’s upgrade, which brings with it the new payment structure. Transactions are now divided into two types; old and new, but soon only new types of transactions will be available to be mined.
For any questions about the ETH upgrade or how your mining may be affected, reach out to us through our Telegram chat support.