19. Ethereum London Hard Fork – what is it ?
The Ethereum Hard Fork called London took place on August 5, 2021, on the Ropsten network. It was a summary of the hard work of the project’s developers, which in a way prepares Ethereum for Update 2.0, the transition from Proof-of-Work consensus to Proof-of-stake. London came into effect at block 12,965,000 and introduced six key changes to the Ethereum network.
The most significant changes that occurred during this hard fork are:
∙ EIP-1559 – the most significant change, which resulted in reduced fees for the ETH 1.0 chain.
∙ EIP -3198 – a change to the BASEFEE opcode.
∙ EIP-3529 – change in gas charges.
∙ EIP-3541 – rejection of contracts starting with 0xEF.
∙ EIP-3554 – “ice age” delay.
∙ Improvement of network scalability.
Before we go into an explanation of all EIPs, let’s discuss in general terms what an update itself is. Ethereum is a universal platform with a number of different applications. Among other things, its ecosystem is where most decentralized applications and DeFi are built. Consequently, Ethereum faces some problems. It mainly struggles with low bandwidth and scalability. As a result, this leads to high transaction fees, aka gas prices. London Hard Fork is a solution to these problems. It will allow more users to benefit from the capabilities of this network. After the introduction of the hard fork, ETH tokens began to have a function – “burn”, which will simultaneously reduce its supply. Thus, Ethereum tokens became deflationary.
The London update is also known as EIP-1559 This Hard Fork made Ethereum a unique altcoin.
Change in transaction fees – EIP-1559 update
The most anticipated update that went into the London hard fork. It is also the biggest one that took place at the time. It introduces a base fee for gas. This allows network users to more accurately estimate how much their transaction will cost.
With EIP-1559, it is the user who determines the maximum investment fee they are prepared to pay, along with a fee for the miner and a tip for the miner. EIP also burns off some of the transaction fees, which is a significant improvement in the economics of the Ethereum network. This fee structure is also very beneficial to miners.
BASEFEE is the operating code, which is another enhancement to the whole update. It returns a base charge per block where the operation is performed. This gives smart contracts easier access to value in the chain and can effectively eliminate the transmission of evidence of fraud and gas price derivatives.
That is, the reduction of the execution refund from 50% to 20%. The change offsets some of the block size variance introduced by EIP-1559. This ensures that a block cannot use more than twice the gas limit.
Prevents the implementation of new smart contracts that start with byte 0xEF. This will increase the range of enhancement possibilities for the Ethereum Virtual Machine. Of course, this change did not affect already existing contracts.
EIP-3554 was updated once again after December 1, 2021. It introduces a mining freeze due to the transition of the network to PoS. As the PoS was not yet ready on the date indicated in the update, the “ice age” was again delayed.
Before the hard fork London Ethereum was a network incapable of scaling. The system handled around 30 transactions per second, a relatively low score. Initially, when Ethereum had few users, this problem was not so troublesome. As its popularity grew, this problem needed to be addressed, hence the London update.
The list above are the changes that the London hard fork has introduced. Since the London update, Ethereum has already burned ETH worth more than $1 million. Furthermore, in the deflationary blocks that have been added to the chain, the amount of ETH burned is higher than the block rewards themselves. Despite all the flaws, which are effectively “fixed” by the developers of the network, Ethereum still has a leadership position in the industry. All thanks to smart contracts, the developers involved and the tools the ecosystem offers.
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