• The price of Ether (ETH) rises as the London upgrade approaches

  • Ether cryptocurrency is currently at a two-month high as a result of the much-anticipated London Hard fork upgrade, which is intended to reduce the rate at which new tokens are minted.

    The Ethereum Price and the London Hard Fork

    The Ethereum Improvement Protocol 1559 (EIP 1559), also known as the London hard fork, is set to go live on Thursday, August 5, at 1:59 p.m. The expectation that it will lead to continued growth for the cryptocurrency has been met with skepticism among cryptocurrency enthusiasts. Ethereum is currently trading at $2,634.32, representing a 6.27 percent increase over yesterday’s price.

    The EIP-1559 aims to make Ethereum users’ transaction costs predictable. Currently, network users must compete with one another in order for miners to process their transactions. That is, if the network is busy, the fees are much higher than if it is quiet.

    The upgrade divided the 1300 new Ethers issued daily to pay miner fees into three parts. The network will remove one, the lowest possible cost for payment processing to miners, from circulation via mining. The burning represents a watershed moment in Ethereum’s history.

    Some investors believe that because burning is limiting the supply of ether, the price will skyrocket. Developers, on the other hand, argue that the pricing influence is far from certain. According to Ben Edgington, an ether developer at ConsenSys, they won’t know what the effects of the ether burned will be until it’s implemented.

    Should Speculators Be Concerned?

    Although EIP-1559 is intended to strengthen Ethereum’s ecosystem – which is known for its smart contract capabilities that power DeFi, or decentralized finance, applications, and NFTs, or non-fungible tokens – it is unlikely that the upgrade will have a significant impact on investors in the short term.

    However, the proposal’s co-authors believe that by limiting supply, ether will become deflationary in the long run. It would be ‘quite good’ for investors, especially given recent inflationary discussions in the United States. If crypto-investors so desire, they will be able to hold a deflationary asset.

    Investors should also keep in mind that EIP-1559 does not reduce the cost of gas fees or network transactions, so they may still be quite expensive. However, the upgrade is critical because it has the potential to improve the Ethereum user experience while also increasing ether prices.

    More enhancements are on the way for next year.

    EIP-1559 is insignificant in comparison to the upcoming Ethereum 2.0. Ethereum 2.0 will be completed by the first quarter of 2022, with the goal of addressing the entire network.

    Ethereum 2.0 is converting the network from a proof-of-work to a proof-of-stake system. On the new system, users will stake their ether to verify transactions and earn coins.

    Another significant advancement is the developers’ scaling up project. They will build more side networks and connect them to eliminate major network congestions and transaction costs.

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