Ethereum London hard fork upgrade takes place; Here's what is happening to ETH

A major technical upgrade to the Ethereum blockchain platforms happens on August 5. The ‘London hard fork’ is a precursor to Ethereum 2.0 ahead of 2022. The upgrade is expected to make some significant changes to the platform and potentially change the mining method of the cryptocurrency. ‘The London Upgrade’ or ‘EIP-1559’ went live around 5.30 pm IST on Thursday and trading platforms have disabled deposits and withdrawals for Ethereum during the period. The price of ETH is expected to be volatile following the upgrade. 

Ethereum London upgrade 

According to ethereum.org, the open-source resource for the Ethereum blockchain community, the network is in high demand and thus causing the ETH charges to skyrocket. ETH mining and trading have become significantly expensive over the last few months. Moreover, it also claims that the underlying algorithm that keeps Ethereum secure and decentralized needs to be more eco-friendly. Earlier, claims regarding ETH being energy-intensive was raised by many cryptocurrency investors as well as experts.

Joe Lubin, founder of blockchain software company Consensys, had earlier told Bloomberg that the changes were part of the long ‘roadmap’. Lubin claimed it to be the introduction of ‘ultra sound money’, where a fixed amount of gold or Bitcoin represented sound money to certain people. He said that with the introduction of the London hard fork, Ether tokens will be burned from the $13 billion worth of Ether locked up in Ethereum 2 and 70 billion locked up in decentralized finance. Going into the process, Ethereum price stood at Rs 2,00,200 for an ETH.

What happens after the Ethereum London upgrade?

According to reports, the update will reduce transaction fees by burning Ether with each transaction, which is expected to inflate the price of Ether. Inflation is expected to happen due to a deflationary effect. However, a part of crypto investors expects a dip in the market after the change. According to data from Ethereum nodes and network explorer Ethernode, 75.7% of the Ethereum worldwide will be put into the Ethereum London hard fork process. Following the process, if miners don’t agree with the change, Ethereum will have two separate tokens under its platform.

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