Ethereum "London upgrade" is rolling out today - what can go wrong?
Today is a historic moment for the crypto community because one of the long-awaited updates in Etherium is on its way.
In the last few days, Ethereum price surged above $2700 - the main reason - "London upgrade".
What is the "London upgrade"?
The "London upgrade" will integrate 5 protocols that are expected to improve the Ethereum network.
The most important of them is EIP-1559 which will double the capacity of each block and will make some fee related changes. Currently, users are competing to pay higher fees for their transactions to be prioritized by miners and the miners receive the whole fee to process the transaction. EIP-1559 will replace the auction-based fee structure with an automated base fee.
Even though users can "tip" the miner in order for the transaction to be processed quicker, however miners will then only receive the "tip" and the base fee will be destroyed or "burned". Additionally the new upgrade will reduce the supply of the cryptocurrency making Ethereum a deflationary asset.
How will it affect the price and the rest of the crypto space?
According to many ETH enthusiasts, it is expected that the price will significantly increase due to the reduced supply. In addition, the upgrade will have a positive footprint on the crypto space. EIP-1559 should reduce transaction fees that could help the system to scale easier. The upgrade will affect not only ETH but also many DeFi projects built on the Ethereum network and NFTs.
What can go wrong?
According to those who have helped with the upgrade "It was an incredibly complex change, the largest done on Ethereum Mainnet to date". In comparison, the implementation of the previous less-complex Berlin upgrade, led to a consensus error after block 12244294.
What could happen today and how it will affect the price of the cryptocurrency - just a matter of time until we find out.
Militsa Dimitrova is a crypto enthusiast with experience in content creation & social media, who produces her own Cryptocurrency Newsletter and Podcast both in English and Bulgarian. She joined FXCM as an Accountant in 2020, after obtaining a Bachelor's degree in Accounting from the University of National and World Economy of Sofia.