According to reports the high fees on the Ethereum network, which miners currently process and approve, are set to change with the pending introduction of the EIP-1559 protocol during what is often referred to as the London update. The transition occurs in tandem with the Ethereum Foundations preparations for Ethereum 2.0, which represents a shift from a Proof-of- work consensus mechanism to a Proof-of-Stake (PoS) consensus protocol.
Nodes can mine Ethereum (ETH), the cryptoasset native to the Ethereum network, and the gas that fuels the transaction of both Ethereum and ERC-20 tokens that use its blockchain. Ethereum is widely recognised as the second most popular coin).
Many amongst the Ethereum community reacted with concern of Ethereum’s miners rebelling against the update proposal. In principle, the EIP-1559 update represents a standardised fee for miners, removing the freedom for miners to set their own mining fee.
During the dispute, Ethereum mining firm, Red Panda Mining proposed a consolidation of hash power into a single mining pool, Ethermine, in order to replicate a 51% attack on the network for “educational purposes.”
Ethermine managed to account for 20.7% of the network hashrate during 36 hours into the attempted 51% attack. As stated by Colin Wu, a researcher for blockchain technologies, Ethermine’s overall hashrate increased by 4% to reach a total of 20.5% on April 7 compared to before April 1. Though some consider the 51% attack as nothing more than an April fool’s joke, the mining community remains split on EIP-1559.
Miners often buy and sell Ethereum. As it remains in their best interests to protect the network and thereby ensuring the price retains a stable value. The upcoming London update will support a buyback protocol in which mining participants fees are purchased by Ethereum and then burned, initiating greater demand and shrinking the current total supply. All along with the Proof-of-Stake protocol, which will be implemented into Ethereum 2.0, ETH will become a deflationary asset in order address the network’s current scalability challenges.
