Ethereum just rolled out a major change called the "London hard fork." The software upgrade is changing the way Ether moves around the blockchain and has shown positive sentiments in the market.
Ethereum Price Prediction: $3,000 Price Surge?
Ethereum is currently the second-largest blockchain network across the cryptocurrency board. It went through a major upgrade on Thursday, August 5, Reuters reported. Since the activations of the upgrade, the price of Ether went up to $2,620, a 3.5 percent increase in the 24 hours after the rollout, CNBC said. This was after it initially traded lower as the upgrade drew closer.
The upgrade means a few and necessary changes are coming to the code carrying and supporting the world's second-biggest cryptocurrency.
Experts see the London hard fork providing positive support for ETH to rally in price. One of the upgrades included in the hard fork is going to make Ethereum a scarce resource, offering some stability in how prices are adjusted and predicted.
The new supply dynamics should spark a new cycle where price targets can be rationally set and potentially met.
Despite the independently positive sentiments toward ETH and the Ethereum blockchain currently, experts still believe that Ethereum's price remains correlated with Bitcoin.
Should BTC reclaim its price at $40,000 and manages to maintain it, ETH has a good chance of rallying further and hit the $3,000 mark, Reuters reported.
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Ethereum London Hard Fork
The upgrade was expected to stabilize transaction fees and reduce the supply of the ETH token, the native token of the Ethereum blockchain, per Reuters.
The blockchain has a long-standing problem with scaling, which has been tough for Ethereum users. It is highly unpredictable, and sometimes its hefty transaction fees can turn off even its biggest fans. This has especially been a problem in recent months, all thanks to the popularity and hype around nonfungible tokens or NFTs, which are mostly built on Ethereum's blockchain. Decentralized Finance or DeFi has also seen some exponential growth, and it too largely uses the Ethereum blockchain.
This Gas Fee will then be burned instead of going in the pockets of miners, which some people claim help in making ETH a deflationary asset.#CryptoNews
— Arthat | अर्थात | (@Arthat_) July 30, 2021
The Ethereum Improvement Proposal (EIP) 1559 changes the way transactions are processed on Ethereum. It is designed to fix a lot of the aforementioned issues by destroying or "burning" ETH coins and changing the way transaction fees work by becoming a more deflationary pressure and, in theory, making them more predictable.
EIP 1559 also employs a protocol that will have an algorithm decide the transaction fee based upon overall demand on the network. This then prevents major spikes in prices.
The upgrade does not promise cheaper prices for buyers, necessarily, but it does make the entrance and purchasing of ETH more predictable and stable. The upgrade should also protect the market and its community from falling prey to erratic spikes in the market.
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