The most significant change to the Ethereum blockchain since 2015, which went into effect on Thursday, shows that the network is well positioned to perform an even bigger upgrade to reduce its power consumption by 99%, according to its inventor Vitalik Buterin.
The world’s most widely used blockchain has updated its software, known as the London hard fork, which includes a fee reduction feature called EIP 1559. The fee reduction has already wiped out $ 2 million (around Rs. 14 crores) of its native. cryptocurrency Ether in just a few hours since it went into effect, according to the Ultrasound.money tracking website. This could put upward pressure on the price of Ether go forward. Ethereum Price in India amounted to Rs. 2.05 lakhs at 11:30 am IST on August 6th.
“1559 is definitely the most important part of London,” Buterin said in an interview with Singapore’s Bloomberg News. The London upgrade is “proof that the Ethereum ecosystem is capable of making significant changes.”
Ethereum and its better-known rival Bitcoin both operate using a proof-of-work system that requires a global network of computers operating 24 hours a day. Ethereum software developers have been working for years to move blockchain to what the this is called a proof of stake system – which uses an entirely different approach to securing the network which also eliminates the problem of carbon emissions. This change to ETH 2.0 will be made through a process called merger and is expected by early 2022, but could happen as early as the end of the year, Buterin said. Bitcoin price in India amounted to Rs. 29.97 lakhs at 11:30 am IST on August 6th.
The London hard fork “definitely makes me more confident about the merger,” he said.
Ether has seen an already incredible price increase over the past 12 months, along with Bitcoin and other digital assets. Ether has risen by around 590% in the past year, while Bitcoin has more than tripled, according to data compiled by Bloomberg. These gains come even after both coins have fallen about half from their recent all-time highs in April.
Part of this ether price surge is due to the explosion of non-fungible tokens, or TVN, which are digital files whose authenticity and rarity can be validated by a blockchain like Ethereum. NFTs have grown in popularity this year, fueled by deals including the record-breaking $ 69.3 million (around Rs 510 crore) sale of “Everydays: the First 5,000 Days” by a digital artist. Beeple and a video of a LeBron James dunk. Now everyone from art galleries to the International Olympic Committee, fashion houses and Twitter Inc. are offering digital tokens.
Cryptocurrency Jumps After Software Upgrade
Thursday’s change will also put Ethereum on a path closer to how Bitcoin works. Unlike Ether, Bitcoin has had a fixed supply of 21 million coins since its launch in 2009 that will never be created. This difference has led Ethereum critics to say that it should not be viewed as a digital currency similar to Bitcoin.
Buterin initially set a cap on the amount of Ether that can be created in his 2013 white paper outlining the creation of Ethereum. There was room for change, however, and the idea of moving to proof of stake has always been the plan. Proof of stake would eventually change the economy of Aether, Buterin said.
“There was no real possibility of making very strong, long-term commitments to monetary policy,” he said of his original vision. Then, in 2018, he attended a conference on economics and computation at Cornell University where the inefficiency of first-price auctions was discussed. It’s an auction where the highest bidder wins, and how Ethereum and Bitcoin have structured their fee markets. Ethereum is now out of this system due to EIP 1559.
Another big change on Thursday is that the block size on Ethereum is now variable. Previously, the number of transactions that could fit in a block was fixed, which meant that users sometimes had to wait for their transactions to be processed when network demand was high. Blocks can now increase or decrease to match the amount of incoming transactions.
“Now it’s getting a lot easier to send a transaction that will be included in the next block and that’s very important for the user experience,” Buterin said.
© 2021 Bloomberg LP