It’s not rare for a crypto to undergo upgrades. In fact, most networks regularly make upgrades in some form or another. Usually, though, theses are just minor bug fixes and the like. Others make larger upgrades semi-regularly, like Uniswap (CCC:UNI-USD), which has made two large upgrades since its launch in late 2018. However, Ethereum’s (CCC:ETH-USD) new upgrade just feels different. The London hard fork is one of the biggest pieces of Ethereum crypto news since the network’s inception.
The Ethereum 2.0 overhaul is taking place right now, while the network remains in use. The ambitious new upgrade is as robust as it is controversial.
Here’s what you need to know about it.
Ethereum Crypto News: The London Hard Fork Sees New Proof Algorithm, Burned Coins
- The Ethereum 2.0 upgrade is taking place with the London hard fork. A hard fork is a place on the blockchain where the chain diverges to a different path. This hard fork went live today at around 8:30 a.m. EST.
- One of the largest changes resulting from the fork will be Ethereum’s change from proof-of-work to proof-of-stake. The former proofing algorithm has caught criticism in the past, due to its high power consumption. Proof-of-stake will allow the network to rely on less energy to perform transactions.
- Another major feature will be the fee market. Where before, an algorithm set the prices for transaction fees on the network, the fee market will prioritize transactions in a way to make gas fees more stable in price.
- Perhaps most controversial is the network’s plan to burn tokens, which will see miners lose out on the extra income from transactions.
- Where before, miners were rewarded for administrating transactions on the network with bits of ETH, all extra ETH left over from transactions will be sent to a burn address.
- There is no set limit on the amount of Ethereum tokens, creating a major hurdle when trying to build the value of the ETH coin. With this new burn function, the supply will grow more slowly, helping to drive prices up.
- Matthew Gould, CEO of blockchain domains platform Unstoppable Domains, calls this aspect of the upgrade one of the most valuable. “The most exciting thing about the Ethereum London upgrade is that it burns Ethereum, which is great for the price of ETH and a big win for speculators,” says Gould.
- So ultimately, while miners may not like losing out on this income, it will ultimately do well to build the value of one’s wallet anyway.
- In fact, since the hard fork this morning, ETH has appreciated 4% in value.
- Likewise, miners have been reeling in income in the days leading up to the hard fork. The five largest Ethereum mining pools have made more than $192 million over a seven-day period, collectively.
On the date of publication, Brenden Rearick 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.