Ethereum, the world's second-largest cryptocurrency after Bitcoin, has just undergone its biggest update yet, dubbed "London". What changes have been made?
Towards stabilization of transaction fees
The Ethereum blockchain has already seen no fewer than 11 updates since its inception in 2015. However, the update (Hard Fork) called London is one of the most important in the history of the second most popular cryptocurrency after Bitcoin.
Hard Fork London aims to improve two areas. The first concerns the scaling of the blockchain, with an increase in block size, which should normally be doubled, enabling users to carry out twice as many transactions. However, it should not be possible to fill these blocks completely, as the aim is above all to stabilize fees.
The second area for improvement relates to a major problem with this cryptocurrency, namely transaction fees, which increase without users being able to predict it, and are sometimes very high. Since the growing interest in non-fungible tokens (NFTs), the volatility of transaction fees has only increased.
EIP-1559, a major development
Among the 5 validated Ethereum Improvement Proposals (EIPs), one in particular caught the attention of users: EIP-1559.
This change alters the way fees are set. Until now, users proposed a price, which the "miners", who validate the transactions, could choose to accept or reject. The problem was that this bidding system helped to inflate transaction fees. Thanks to EIP-1559, transaction fees are now calculated by an algorithm that takes global demand into account.
According to some experts, these changes should reduce supply and, consequently, cause the price of Ether to rise. Since the Hard Fork London, set up on August 5, the price of the cryptocurrency has risen by 27%, with Ether trading at $3,150 in the early afternoon of August 10.