Will ETH Miners Revenue Collapse? LONDONâS HARD FORK IS IMMINENT! â Explica .co By Compartir
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Ethereumâs upgrade to the London Hard Fork will include EIP-1559, which will reduce the amount of ETH miners receive.Is that a curse or a blessing for Ethereum miners?
London Hard Fork, a planned update for Ethereum, will first be verified and installed on the testnets.
Tim Beiko of the Ethereum Foundation announced today that the London Hard Fork will be available on Testnet Ropsten around June 24, followed by Goerli on June 30 and Rinkeby on July 7.
As soon as the update has been successfully activated on these networks, a lock is set for the main Ethereum network.That should be in July.
The London update will implement five separate Ethereum Enhancement Proposals (EIPs).These are changes to the blockchain code that must be widely accepted by community members before they can be adopted.
The most controversial change is EIP-1559, which was originally proposed by the creator of Ethereum, Vitalik Buterin.It changes the way network fees work and how miners are rewarded, the people who run the software that processes all transactions and shapes new ETH.
Currently, every time someone makes a transaction or interacts with a smart contract on Ethereum, they have to set a fee, which is more or less a guessing game.To make a transaction quickly, you can set a high fee, which almost guarantees that miners will block it.
If the fee is set too low, that transaction will likely wait until the miners are less busy processing higher paying transactions.Speed ââis important in a number of cases, including when trading on decentralized Ethereum-based exchanges like Uniswap, where token prices can fluctuate rapidly.Traders lose money if they wait.
This has often drawn criticism from the community in recent months.
To solve this problem, EIP-1559 will double the capacity of the blocks.
That means that most of the time, the blocks will have an additional 100% of their capacity to fill with transactions.Therefore, as long as a transaction is submitted with a higher rate than the base rate and contains a tip for the miner, it will be included in the following blocks.
The additional transparency is touted as an improvement in the user experience.However, some miners claim that it is detrimental to their experience.According to EIP-1559, this basic fee is burned instead of going to the miners.The idea is to turn ETH, which has no supply cap like Bitcoin, into a deflationary asset, or at least create deflationary pressure.
In theory, less ETH in circulation should be good for miners because it can increase the demand and exchange price of Ethereum, which miners still receive as a reward when they create a new block.
SparkPeople, the largest Ethereum mining group, is unconvinced and has spoken out against the change.In February, he wrote:
EIP 1559âs burning tx rate is a redistribution of wealth, from miner to holder.
That is why many people support that.But it is a majority tyranny in the name of a better user experience.Itâs a theft .
As long as London is only on testnets, itâs just an experimental theft.But the update is almost there.
It is possible that this update could cause Ethereum minersâ income to collapse by as much as 50%, which used to be a reason to attempt a mining revolt, as it is now called.However, the situation seems to have calmed down from the first reaction.
The update itself has been long overdue and many are still very excited about it.So much so that it is considered to be one of the biggest bullish catalysts to come make Ethereum to come.
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