Ethereum, the second-largest cryptocurrency in the world, has activated a major change known as the London hard fork that seeks to alter some key features in the way the digital coin operates, including how transaction fees are calculated, ideally smoothing them out and making them less volatile.
Knowing how fees are calculated will allow users to better estimate how much a transaction actually costs.
This means that instead of blindly cushioning a transaction with extra gas to ensure that miners process the transaction, users can be more precise in their estimations — which will likely result in them paying less.
Tim Beiko, a developer with the Ethereum Foundation, told The Decrypt Daily podcast that the cost could be as much as a 20 percent reduction.
Another change sets the stage for a major transformation of Ethereum that will make it harder for miners to earn money and could eventually make mining irrelevant.
The price of Ether, the native token for Ethereum’s blockchain, rallied in the runup to the changes, gaining as much as 14.7 percent this week to reach $2,786.40 by Thursday on the back of investors’ enthusiasm over the software upgrade.
Ethereum co-founder Joe Lubin told Bloomberg TV, ahead of the London fork change, that the alteration will make his platform bigger than Bitcoin by “orders of magnitude”.
JPMorgan predicted in early July that crypto staking could become a $40 billion industry by 2025, due in large part to changes to the Ethereum network and a merge that will massively expand the size of the more energy-efficient proof-of-stake ecosystem and provide more opportunities to earn.
The overhaul, known as Ethereum 2.0, changes the way the network is secured and coins are created, moving from a proof-of-work system to a proof-of-stake system.
Proof-of-work is the dominant blockchain validating protocol, while proof-of-stake is the emerging and faster-growing protocol. Both incentivize blockchain validation with rewards but the latter is much more energy efficient.
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