Ethereum, the world's second-largest cryptocurrency, completed a major upgrade to its "London hard fork" on Thursday. According to CNBC, major changes include changing the way transaction fees are calculated to reduce the volatility of Ether; It also makes it harder for miners to make money, and may eventually make mining irrelevant.
The much-publicized and somewhat controversial upgrade has pushed ether up more than 4.5% in the past 24 hours to around $2,805.
The unpredictable transaction fees associated with operating the ether blockchain layout have long plagued its users, and even die-hard fans can't stand the sometimes ridiculously high transaction fees. This problem has been exacerbated recently by the fact that most of the "non-homogeneous tokens" (NFT) that the market is interested in are built on ether blockchains, which are also heavily used by the burgeoning "decentralized finance" (DeFi).
Thursday's upgrade, though codenamed "London," had little to do with the British city. To solve the problem of ether being destroyed or burned, and to change the way transaction fees work to make them more predictable. If you think of the Ether blockchain as a motorway, the London Hard Fork would create extra lanes to ease traffic and standardise tolls.
The revamped Ether blockchain, experts say, will shift from energy-guzzling proof-of-work to proof-of-stake. In the proof-of-work mining system, miners solve difficult mathematical equations to create new ether coins. Proof-of-stake systems require users to leverage their existing Ether to authenticate transactions and create new coins. This is a big change not just for Ether, but for other cryptocurrencies as well.
In the short term, miners won't be making as much money as they used to, and in a few years' time, when the Ethereum blockchain is fully integrated into the proof of equity system, it won't make sense to mine the ether.