Today, Ethereum (CCC:ETH-USD) is on the minds of many crypto investors. Ethereum (ETH) crypto fans have more to digest today, as crypto experts expect the London Hard Fork to go into effect on Aug. 4. Ethereum enthusiasts appear to be growing ever-more bullish on ETH today, with the crypto seeing gains of more than 6% over the past 24 hours, at the time of writing.
Given how controversial the London Hard Fork has become in the crypto world, it’s something worth understanding. This release had previously been delayed, but expectations are that this release could be a big deal moving forward. Over the past week, crypto investors have piled back into ETH, with the token trading 10% higher over the past seven days.
Accordingly, let’s dive a bit more into the London Hard Fork news to see why it matters for crypto investors.
London Hard Fork Announcement Driving Ethereum (ETH) Crypto Higher
This release is an integral part of Ethereum’s move to Ethereum 2.0. This will replace the crypto’s current proof-of-work model with a proof-of-stake model. This has been tied to lower energy-consumption levels, something ESG (environmental, social and governance) investors have lobbied for recently. And ETH investors also benefit from protocol updates that will make Ethereum less inflationary and lower-fee in nature. Both are big positives for investors.
That said, these updates aren’t without controversy. Experts believe that these updates may pose unique risks to the Ethereum network. Others (specifically miners) don’t like the changes that will be coming with this update.
One of the central tenets to this update is the idea that Ethereum will cease being an inflationary cryptocurrency. Reportedly, miners will no longer receive transaction fee income from block validation. This income has been central to ETH miners, and given the fact that the Ethereum network has reduced the ETH miners receive as a reward for validating a block from 5 ETH to 2 ETH recently, questions as to how robust the mining community will be moving forward persist.
Yes, transaction fees are likely to stabilize as a result of these moves. And congestion on the Ethereum network should reduce. However, removing incentives for miners is something that many crypto enthusiasts question.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.