A major update of the Ethereum cryptocurrency (ETH) was successfully completed this Thursday (5). The Ethereum 1559 Improvement Proposal, or EIP-1559, is expected to reduce the costs of fees charged—which, with the expansion of NFTs, came to $50—on each transaction, as well as making them more predictable.
In other words, now the user will know the amount he will pay at the base rate, defined by artificial intelligence, which will change according to market movements. Currently, the figure is set by miners, who will earn less money after the upgrade — potentially good news for anyone looking to get a new graphics card.
Another change to the “London Fork”, as the update is dubbed, involves the “burning” of tokens used as payment to miners. Instead of being sent to the miners, the coins will be taken out of circulation. For this, tokens are sent to addresses with private keys, without any user access, to ensure greater control of the market.
The purpose of limited issuance is to reduce inventory and reduce inflation, which is expected to drop by 1%. With the change, the update is expected to increase, consequently, up to five times the price of the cryptocurrency in 2022.
Until the moment of the report, the ETH increased about 4%, worth approximately US$ 2,800; in Brazil, the cryptocurrency is being traded for R$ 14 thousand. Last Wednesday night (04), the asset had already appreciated around 19% in just one week, showing investors’ excitement over the change.
And the miners?
While ensuring a new course with potential appreciation for the currency, the move should bring big changes for miners. With the tokens that served as payment being “burned”, the class will lose a large source of income, which can move the market.
According to CNBC, miners can still close deals to sell the processing power of their powerful computers to capture tokens and earn “tips”. However, the trend is for earnings to be considerably lower compared to the pre-London Fork balance.
According to market analysts, the “refreshment” of miners may come in the long term, with the possible appreciation of the currency. Still, some experts believe the function could become completely obsolete in the near future.
The Ethereum 2.0 update, due out next year, promises to revamp the blockchain to be more environmentally friendly, which should further reduce the share of miners and their powerful computers in the Ether cycle.