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What Is Ethereum London Hard Fork? Why Is It Important?

What Is Ethereum London Hard Fork? Why Is It Important?
Author: changehero

Contents

While ETH 2.0 still looms on the horizon, a heatedly discussed London hard fork is soon to hit the current mainnet. In this guide, we explain what it means for Ethereum users and developers.

Key Takeaways

What’s the current state of Ethereum?

London hard fork is the 11th planned upgrade to the Proof-of-Work Ethereum network. While Ethereum 2.0 is getting built, the majority of transactions still run on the PoW network.

Ethereum network upgrades
Source: Luit Hollander on Medium

Previous planned hard forks made the network what it is today. It can be hard to imagine but some things like NFTs or 2 ETH block rewards were not always present. In 2016, the network was hard forked four times, with DAO fork being the most significant. It rewrote the history of the blockchain to mitigate the DAO hack and caused Ethereum Classic to branch off. Next upgrade, Metropolis, consisting of two hard forks, Byzantium and Istanbul, stretched out from 2017 to 2019. Some of EIPs that were supposed to be included in the Istanbul hard fork, ended up in the Berlin upgrade this spring. Many of the hard forks included a so-called “difficulty bomb” delay. “Difficulty bomb” is a mechanism designed for an eventual transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS) which will make mining unfeasible once PoS Ethereum is functional.

What is Ethereum London Hard Fork?

So, as is clear from the previous section, London is the upcoming planned upgrade to the PoW Ethereum network. When is Ethereum London hard fork? The Ethereum London hard fork date of arrival is August 4, 2021. Do ETH holders need to do anything? If you are using an Ethereum client like Parity or geth, make sure to update it. If you are using third-party software to interact with the Ethereum blockchain, check in with them for information on support of the fork.

EIPs in ETH London hard fork

London hard fork is going to include five EIPs. But first things first, what is EIP 1559?

EIP-1559: Fee Market Change for ETH 1.0 Chain

EIP-1559 fee change
Source: BitMEX blog

This is the core change of the hard fork that caused so much debate. On the one hand, it will decrease inflationary pressure further but also cut miner’s rewards. This EIP will change the fee mechanics so that instead of a fee auction for transaction priority there will be base fees and tips. Base fees will be burned while tips, which are optional, will keep going to miners. Proponents of the change claim in the long term this will further keep total supply of ETH from inflating and depreciating. Those who oppose the change (mostly miners) say that the new fee mechanics will not be effective to incentivize miners. After all, these days transaction fees make up a significant portion of miner revenue. Despite the debate, the consensus has been reached and starting August 4, 2021 the EIP will be effective.

EIP-3198: BASEFEE Opcode

The second proposal extends the new fee mechanics to smart contract calls. This will help dApp developers and users by making fees more predictable.

EIP-3529: Reduction in Refunds

This proposal removes refunds for certain opcodes: it introduces a conditional limit for gas refunds so they don’t clutter the network. In practice, most refunds weren’t used as intended. Users would ramp junk data in times of low fee costs and refund them when fees are high. This EIP is supposed to help declutter and stabilize the network.

EIP-3541: Reject New Contracts Starting with the 0xEF Byte

At the current stage, EIP-3541 won’t introduce a lot of change to the network. In the future, it can support modifications for new types of smart contracts.

EIP-3554: Difficulty Bomb Delay to December 2021

Finally, by now a staple of Ethereum hard forks, a “difficulty bomb” delay proposal. This time around, it will be delayed to December 2021.

Tweets on London Hard Fork

The update is due in less than a week, and the whole community is filled with anticipation.

London hard fork is significant not only for the Ethereum community. The entire crypto community is watching closely where the changes will take ETH.

Ethereum devs are updating the community on the status. Testnet development is proceeding with some bumps but it’s still better to fix before the release.

Conclusion

Cryptocurrency fosters innovations, and such changes are inevitable on the way to developing a fair and accessible financial system. Most of the holders do not need to do anything, client users will have to simply update to keep up with the network. Stay in the know about the latest cryptocurrency events by keeping an eye on our blog. Updates on social networks are on Twitter, Facebook, Reddit and Telegram, follow and subscribe!

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