ETH Price Shoots to $2700 As London Hardfork Goes Live in One Hour

05. Aug 2021 Posted by Akolkar B on News

Finally the day is here for which the Ethereum community has been waiting for so long! The much-awaited Ethereum London hard fork upgrade will go live in the next hour as per the time tracked on ethereum.org.

As a result, the world’s second-largest cryptocurrency Ethereum (ETH) has shot all the way to $2700. The excitement within the crypto community is clearly visible enough!

The London hard fork will introduce some major modifications to the Ethereum blockchain network, the most important being the Ethereum-Improvement-Protocol (EIP) 1559.

The EIP-1559 changes the structure of transactions taking place on the Ethereum blockchain network. At present, Ethereum users have to guess as to how much they need to send to the miners for processing transactions.

However, the EIP-1559 will include a base fee which will make transactions more transparent by lowering the transaction costs. The EIP-1559 does it by burning the transaction fee. Instead of going to the miners, the base fee is taken out of ETH circulation and placed in an inaccessible wallet.

Tim Beiko, a developer with the Ethereum Foundation explained that the EIP-1559 will lower the rate at which ETH is produced. Anytime if the Ethereum network gets congested and the base fee surged past 150 Gwei amid massive demand, then the network would more in transaction fees with each block that it produces.

Thus, after the London hard fork, Ethereum will experience some deflationary pressure. The London hard fork will be great for Ethereum users as it will considerably reduce the transaction costs.

However, the miner community has been standing in opposition of it since it will considerably reduce their revenue. It looks like the London hard fork is an initial step towards moving to the Ethereum 2.0 Proof-of-Stake (PoS) blockchain network.

Furthermore, the London hard fork will remove ETH from circulation. Already over $70 billion worth of ETH is locked in DeFi. On the other hand, over 6 million ETH coins have already moved to the Ethereum 2.0 deposits contracts worth a massive $13 billion.

The excitement has sparked massive rally the ETH price over the last week.