The cost of “ether” jumped by 7% an hour after the largest update. This cryptocurrency can overtake BTC in capitalization.
On August 5, the Ethereum blockchain released the London Hard Fork update, which is game-changing.
The founder of the project, Vitalik Buterin, commented on the innovations in an interview with Bloomberg.
A hard fork is a radical change in the algorithms and code of the blockchain, usually requiring new software. According to Buterin, the update was the largest for Ethereum since 2015. The key innovation was the EIP-1559 improvement proposal, which redesigned the mechanism for conducting transactions and rewarding them.
Previously, miners provided computing power on the basis of an auction – they chose processes with the highest commissions that increase their revenue. London Hard Fork has implemented a flat fee per block based on demand and network load. After the upgrade, miners will not be able to independently calculate and set the amount of commissions, but they will be able to receive a “tip” for the quick completion of transactions.
As Buterin noted, the London update proved the Ethereum ecosystem is ready for further changes. In particular, to the transition to protocol 2.0, which should change the principle of operation of the blockchain with Proof-of-Work (PoW), when miners are paid to conduct transactions and check blocks depending on the capacity, to Proof-of-Stake (PoS), when the amount of remuneration depends on the amount of cryptocurrency in the earner’s account.
The founder of the altcoin said that thanks to this change, Ethereum will reduce energy consumption by 99%, and its mining will become much safer for the environment.
Ethereum software developers have been working for years to move the blockchain to a PoS system that significantly reduces the carbon footprint of mining. The reason is simple – miners do not need to keep the equipment in working order all day long. According to Buterin, the ETH 2.0 update could happen in late 2021 or early 2022.
According to the CoinGecko service, an hour after the implementation of the London Hard Fork update, the cost of “ether” increased by 7% and amounted to $ 2.8 thousand. At the same time, the capitalization of the cryptocurrency increased to $ 329 billion. At the time of writing, Ethereum was worth $ 2772.
As calculated by Bloomberg, over the past 12 months, “ether” has risen in price by about 590%, while the price of bitcoin has jumped almost threefold during the same time. The rally came even after both coins fell about 50% from their highs. Ethereum set the current record on May 12, reaching $ 4182.
CryptoQuant CEO Ki Yong Joo, in a recent interview, predicted that Ethereum will overtake its main competitor, Bitcoin, in terms of capitalization in the future. According to him, the update will increase the security level of the blockchain, its scalability and decentralization.
Earlier, experts reported that due to updates, Ethereum is losing its attractiveness for miners, it can be replaced by the Solana blockchain. So far, the competitor costs only $ 34.5, but it can boast of a high development rate.