Popular cryptocurrency Ether (ETH) has shot off by 20 percent in just one week.
As of the time of updating this story, ETH was reported at $2,797.50. Seven days ago, the price stood at $2,280.
ETH prices slipped from a high of $4,080 on May 14 and it is likely that the popular crypto interface may witness a further ascend.
For those unaware, the rise through the last week has been ascribed to a technology upgrade called London Hard Fork. This upgrade was completed on Wednesday.
The London Hard Fork or EIP 1559 is a set of five improvement proposals achieved by Ethereum.
These were meant to improve the speed of transactions and also reduce the transaction fees. The upgrade also reduces network congestion and offers price transparency.
As with most cryptocurrencies, miners are rewarded a part of the transaction fees. Post the upgrade, ETH miners will not receive ETH for processing transactions.
The new London Hard Fork also restricts addition of newer coins which is likely to increase the valuation on ETH. Reducing supply makes ETH rarer and increases the price.
For those confused between Ethereum and Ether, here's a simple way to understand. Consider Ethereum as the network and Ether as the cryptocurrency on this network. Going by the words of Ethereum.org, the Ether cryptocurrency is the fuel (Power) for all the apps running on this network.
Post the announcement Reuters reported that 539.29 Ether tokens were burnt in New York. These tokens were sent to a specialized address with unobtainable private keys.
Besides EIP 1559, there are four more improvement proposals:
Tim Beiko offers a detailed report on the EIPs and the process changes in a post on medium.
While the upgrades and possibility of Ethers getting rare suggests a jump in price, announced a balanced report outlining the risks. In their report, CoinDesk analysts said that the new changes could result in new bugs, increase miner revolt and lead to disappointment for users.
Popular Indian exchanges, however, cheered the move. Here are tweets:
#EIP1559 will radically change the supply of #ETH. More than 1200+ ETH was burnt in the first few hours after the launch of EIP-1559, and now it's safe to say that #Ether has the potential to become ultrasound money in a few years— Mudrex (@officialmudrex) August 5, 2021
Watch the stats live at https://t.co/KWdfFysPlv pic.twitter.com/QogyW2IUMO
Ethereum’s London Hard Fork & what you need to know— Nischal (WazirX) (@NischalShetty) August 5, 2021
- Gas fees will be calculated automatically by the network. This is called Base Fee
- Base Fee will be burned (as against previously going to miners)
- You can add a “tip” on top of Base Fee and this tip will go to miners
Image: Courtesy of David McBee for Pexels.