With London Hardfork, Ethereum is slowly changing from Proof of Work to Proof of Stake at the moment. This means that it will no longer be mined and the blocks will be mined by the users themselves. Now, the long-awaited London Hardfork is on the scene and is expected to come into effect with a block of 12,965,000. Let’s take a look at it.
London Hardfork is an umbrella term for five proposals, or Ethereum Improvement Proposals. These proposals are intended to improve the current user experience of the network, rapidly increase its efficiency, and prepare the network for the planned change of the consensus algorithm to proof of stake. Perhaps the most interesting of these proposals is EIP 1559, which changes the mechanism for calculating transaction fees and creates an economic incentive to hold ETH by making it less inflationary.
This proposal seeks to advance several goals: making the fees more predictable through a mechanism that sets limits on fees, simplifying the entire gas management, eliminating unnecessary delays due to a fixed limit on gas per block, achieving more stable traffic on the Ethereum blockchain through dynamic fees (and block size), and enhancing the illusion of digital rarity by burning a large portion of the ETH contained within transaction fees.
This will encourage miners to take the initiative to not mine, but hold, and make the complete transition to proof of stake smoother.
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This hardfork is expected on August 4 this year and comes after the successful release of three testnets – Ropsten, Goerli and Rinkeby. It also comes amid reports of Ethereum’s declining network hashrate. The Ethereum network hashrate peaked in May (643.81 Th/s) and then followed a steep drop in June (to 477.535 Th/s). Since then, however, it has risen slightly, hovering around 513 Th/s. Hopefully the initiative will succeed and miners will actually switch from mining to staking coins.