Ethereum’s long-awaited London hard fork is likely to launch on Aug. 4 between 13:00 UTC (9 a.m. ET) and 17:00 UTC, with block 12,965,000. Many Ethereum enthusiasts are excited for the delayed release, while some are watching on with “cautious optimism.”
As a part of a roadmap designed to lead up to the release of Ethereum 2.0, which will replace Ethereum’s current proof-of-work protocol with proof-of-stake, the London hard fork has been implemented into various testnets. After successful activation on the Ropsten and Goerli testnets, the final hard fork release date was decided. The protocol update includes five Ethereum Improvement Proposals (EIPs), most notably EIP 1559 and EIP 3554, that aim to counter various inefficiencies:
It introduces a new fee structure to make Ethereum less inflationary. This protocol change is highly controversial because it aims to burn part of the fees, hence decreasing miner revenue. EIP-1559 is a proposal to make Ethereum transactions more efficient by using a hybrid system of base fees and tips to more evenly incentivize miners in periods of high and low network congestion. In the proposal, a base fee is the algorithmically determined price you pay for a transaction on Ethereum. Tips are defined as optional fees that you may include to speed up transactions. If implemented, EIP-1559 could greatly reduce transaction costs and improve Ethereum’s overall user experience.
As Ethereum has grown in popularity, estimating appropriate ETH gas fees has become complicated, and users often encounter transaction confirmation delays. Ethereum Improvement Proposal (EIP)-1559 offers a remedy for these issues by updating how transactions work on Ethereum and changing the underlying economics of the network’s existing monetary policy. EIP-1559 proposes a new approach to transaction fees in which users would pay an algorithmically adjusted “base fee” for each transaction, alongside the option to include a tip to speed up a transaction.
Every Ethereum transaction has an associated cost that helps power the network and prevent bad actors from spamming it. These transaction costs are paid in ether (ETH) and known as “gas.” Currently, Ethereum uses a simple auction system to determine which transactions are included in a block. The more you offer to pay, the more likely a miner will include your transaction in an upcoming block. However, this auction system is arguably inefficient because users must estimate the appropriate fee required to complete their transactions. Consequently, some users pay more than other users whose transactions have been included in the same block. By switching from the current system to EIP-1559, the industry widely believes that users could save approximately 90% in transaction costs.
It delays Ethereum’s difficulty bomb to Dec. 1. This mechanism will incrementally increase the difficulty of mining on the Ethereum network, effectively “freezing” proof-of-work in preparation for Ethereum’s move to proof-of-stake.