Ethereum is a major step closer to merging with Ethereum 2.0 now that the London hard fork upgrade has been successfully activated. The upgrade has been successful, and even the project’s co-founder, Vitalik Buterin, says he feels more confident regarding the pending merge.
According to Buterin’s recent interview, EIP-1559 has been the most important part of London, even though it was only a part of the full hard fork. As many are likely aware, this specific EIP has tweaked the fee generation mechanism, which will result in a portion of the fees being burnt.
So far, over $10 million in Ethereum has been burned following the launch of the upgrade. Meanwhile, Buterin commented that the London upgrade’s successful deployment is proof that Ethereum’s ecosystem is more than capable of major changes.
He also noted that the upgrade makes him more confident about the pending merge with Ethereum 2.0 that will transform the blockchain in the largest way yet. This switch to Ethereum 2.0 has been one of the most anticipated events in the entire crypto industry for a few years now, although it has constantly been postponed due to the complexity of the move.
Ethereum still has a way to go before reaching ETH 2.0
Ethereum’s official documentation shows that the mainnet is supposed to merge with the Proof-of-Stake (PoS) Beacon Chain, which will result in Ethereum adopting PoS, and permanently drop Proof-of-Work (PoW). This is considered necessary as PoW is not only slow but also harmful to the environment. It is an old consensus algorithm — so old that it is used by Bitcoin itself, the oldest and largest cryptocurrency.
Ethereum aims to switch to a faster, more modern PoS, which will reduce, or even completely eliminate some limitations that the network is facing currently. The project’s fees should go down, its speed should increase, and the project is expected to become more capable of handling massive amounts of demand that it is facing.
The documents also show that the merge will come before the rollout of shard chains, but it is still unlikely that it is going to happen in 2021, even though developers are working on ways of speeding up the timetable and moving faster. Still, once it does finally arrive, the new, merged mainnet will be able to run smart contracts on PoS, which will also eliminate mining operations and reduce the network’s energy consumption by as much as 99%.
At least, this is what is expected to happen. This is important as energy consumption, the carbon footprint that mining is producing, and similar issues have been a thorn in the side of many coins, especially Bitcoin. In fact, according to Elon Musk, Bitcoin’s high energy consumption is the reason why Tesla decided to stop accepting Bitcoin payments only a few months after this became a possibility.
The importance of London upgrade
As for the London upgrade, it brought more than fee burning alone. It also ushered in variable block sizes, meaning that people are now less likely to have to wait for long periods of time for their transactions to be processed. Since Ethereum is a massive ecosystem, full of dApps, other tokens and coins, smart contracts, and it now bears the majority of DeFi and NFT activity, it is not surprising that its blockchain is overburdened with transactions.
Unfortunately, fixed blocks have made it impossible to do anything about it but try to introduce small changes in hopes of bringing even the smallest relief. London upgrade was the first big change in the way the blocks themselves function, as they can now expand or contract in order to match the transaction load.
This will massively improve user experience, the speed at which waiting transactions are being processed, and generally, it will reduce the waiting periods. As such, users conducting the transactions will no longer have to compete for miners’ attention, and so the average trading fee should go down gradually, as well. Buterin sees this as a major contribution to improving user experience, and very positive development for Ethereum market sentiment, which it does seem to be.