London burning! 100,000 ETH up in smoke after Ethereum upgrade

London burning! 100,000 ETH up in smoke after Ethereum upgrade

As Ethereum 2.0 begins to materialise following the EIP-1559 upgrade, a jaw-dropping $315 million of ETH has been burned by the new mechanism, it has been revealed.

In just the past week, the deposit contract addresses received a monumental 50,000 Ethereum (ETH) – valued at $155M – representing a significant rise in the number of interested investors.

This could, in part, be attributed to the extension of Ethereum 2.0 staking on popular Ledger devices.

The Ethereum 2.0 staking contract recently became the single largest Ethereum wallet, overtaking Wrapped Ether (WETH).

The total ETH staked with Ethereum 2.0 now stands at 7,150,594 ETH, which is worth a staggering $23bn.

Since the implementation of the London Hard Fork’s EIP-1559, the network has burned in excess of 100,000 ETH worth more than $315m.

The London Hard Fork event, alongside the highly-anticipated introduction of EIP-3554 at the start of August, drove a surge in network usage and marked the first noteworthy rise in Ethereum chain activity in more than four months.

Many attribute the 9% rise to EIP-1559, which has simplified and eased the transactional costs (gas fees) charged by the network – alongside introducing a burning mechanism to deflate the price.

What is London Hard Fork and EIP-1559?

London hard fork is a vital stepping stone for the network, ahead of the massive shift from proof-of-work (PoW) to Ethereum 2.0’s proof-of-stake (PoS) technology aimed at saving the network from near paralysis.

A hard fork occurs when there is a major alteration to the protocol of a blockchain network that results in a divergent split between the old protocol and the newer version. In a hard fork, miners must choose whether to continue validating the old blockchain or the new one.

The London hard fork was the latest update, and incorporates five new Ethereum Improvement Proposals – (known as EIPs) – which are all temporary until the permanent Ethereum 2.0 update.

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EIP-1559 was an exciting proposal for the introduction of a ‘base fee’ that tracks gas fee prices across the entire Ethereum network in order to ensure accurate gas fee predictions for network users, while also introducing a deflationary measure that burns transaction fees.

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Valid Points: Ethereum Emerges From Bitcoin’s Shadow

“How much people are willing to pay for bitcoin or ether one or three months out into the future is a good sense of the market sentiment around where things are going,” said Blum in an interview with CoinDesk. The “future premium you pay for ether is close to 10%, whereas for bitcoin it’s right around 7% to 8% right now and the amount of calls being bought out into the future is more skewed to the upside on ether than bitcoin.”

Ethereum Takes a Big Risk–and a Big Step Forward– by Going Green

Ethereum–the biggest presence in cryptocurrency behind Bitcoin— has announced it will be cleaning up its carbon footprint and going green. Ethereum is a decentralized, open source blockchain that uses the token Ether for transactions on its platform. The Ethereum blockchain also gives software developers the ability to create dApps–applications that can range from entertainment to business– and disseminate them to interested users.

Despite the celebrated innovations and widespread popularity of Ethereum, Bitcoin, and other cryptocurrencies, these technologies come with a devastating downside: mining these digital currencies deals a huge blow to the environment. The ecological impact of crypto even caused Tesla CEO Elon Musk to ban Bitcoin as a form of payment. He has since publicly considered lifting this ban if tokens were able to transition to clean energy.

In a study titled “The True Costs of Digital Currencies: Exploring Impact Beyond Energy Use,” researchers found that Bitcoin mining alone requires as much energy as all of the data centers on Earth combined. The preeminent cryptocurrency also has a carbon footprint that matches the city of London. The authors of the study concluded that Bitcoin is responsible for 90.2 million metric tons of carbon gases per year.

Ethereum is no less excessive in its energy use. According to estimates, the blockchain platform consumes as much electricity as the African country of Libya. This energy use was exacerbated by the rise of NFTs (Non-Fungible Tokens), one-of-a-kind digital artworks whose property rights are sold for ETH in exchange for a certification of ownership. NFTs are created and published on Ethereum’s own blockchain.

Ethereum hopes to change the face of crypto by going green with “The Merge”

But all that might be behind Ethereum as the second highest market capitalization in cryptocurrency prepares to turn a new corner it calls “The Merge.” The Merge is Ethereum’s plan to slash its energy consumption dramatically by 2022. The plan involves an upgrade that will reduce the Ethereum network’s energy use by over 99%– firmly establishing Ethereum as the most powerful green option in crypto.

The energy cut will mainly be the product of a new form of validating transactions on the blockchain called “proof of stake.” Proof of stake will do away with the energy-draining process of cryptocurrency mining and introduce staking in its place. New transactions on Ethereum’s blockchain will be approved by “validators” who put up a stake on behalf of the transaction:

“Ethereum’s new model will rely on a network of “validators,” people or groups that put up a stake of at least 32 Ether coins (equivalent to nearly $72,000 as of late July). An algorithm will semi-randomly select who gets to create new blocks in the chain; validators who stake more than the minimum 32 Ether increase their odds of winning—sort of like buying more raffle tickets” explains Adam Bluestein, reporting for Fortune.

This ecologically friendly reinvention could attract a whole new audience to Ethereum’s Blockchain platform, but it also poses the risk of alienating its longstanding users. The Merge will do away with the process of mining, a crucial part of the blockchain’s process that miners profited directly off of in the form of transaction fees. The loss of these transaction fees could cause upset miners to abandon Ethereum altogether.