Hard fork ethereum what do you need to know?
Ethereum, with the largest cryptocurrency market, apart from bitcoin, will soon go through the largest update so far. The hard fork is to lead him to Ethereum 2.0, which will significantly change the current order. What are these changes, what should we actually expect? How will a hard fork affect Ethereum's position in relation to bitcoin and will it be able to dominate the market?
Hard fork - what is it and how does it work?
First, about what a fork is basically. It is no coincidence that it bears this name because it is a splitting of the blockchain into a new cryptocurrency or updating it. The newly created coin can be a slight modification of the original code, or a complete revolution. This is what a hard fork is - bringing about a profound transformation of the block.
Examples of hard forks are Bitcoin Cash and Ethereum Classic. Both of these cryptocurrencies immediately gained great popularity and turned out to be a very lucrative investment. It is worth paying attention to the actions of the biggest ones, because the market is following them. Every day there is a new cryptocurrency that is experiencing temporary fame, but it is thanks to a handful of top cryptocurrencies that the market is relatively cyclical and conservative. The Ethereum fork is so important because if it succeeds, it can have a myriad of consequences.
What to expect from an Ethereum hard fork?
Important for the development of the second largest EIP cryptocurrency, i.e. Ethereum Improvement Proposal, changes were introduced in April 2021 on the occasion of the Berlin hard fork Ethereum. It was supposed to reduce transaction fees, introduce new types of transactions and open Ethereum the way to bigger changes.
The London hard fork Ethereum, announced for July 14, has changed its date to August 4. Skeptics then lost hope about the upcoming changes, but should delays really worry us? The Ethereum revolution will affect millions of wallets, hence it is so important that it does not negatively surprise anyone. A team of IT specialists is working on the changes, thanks to which Ethfork is to be perfected.
The new EIPs are to revolutionize the Ethereum we know. The most important change is EIP-1559 and it is the most commented on. It will burn a significant portion of the transaction fees. In addition, it is expected to drastically reduce Ethereum's resources, making its value potentially good for growth. EIP-1559 is described as a radical change in the structure of Ethereum, which causes a lot of controversy.
There is a total of 5 EIPs. There are also EIP-3198, EIP-3529, EIP-3541, EIP-3554. Many of these changes are expected to negatively impact miners operating on ETH 1.0 and encourage them to mine on ETH 2.0. There will be a phenomenon known as the "bomb of difficulties", that is, a significant extension of the transaction time and a decrease in the profitability of miners' work.
Where is Ethereum going?
The Ethereum road map is to lead it to evolution on Ethereum 2.0, and this will involve a change from proof-of-work to proof-of-stake. This means that the energy consumption of mining Ethereum will be significantly reduced, and the occupation of miners - significantly simplified. This will certainly change the mind of many, discouraged by the cryptocurrency market by the environmentally unfavorable coin mining.
Eth 2.0 will also provide better scalability and agility in executing transactions. This is essential as the forecasted currency volume of Vitalika Buterina will have to process tons of orders in a fraction of a second. Otherwise, during a bull market, higher fees will be imposed on transactions and you will have to wait much longer for their execution.
More and more money is invested in Eth 2.0, at the moment (end of July 2021) it is already 5% of all Ethereum. The complete transition to an upgraded version of the cryptocurrency may take a long time, but it has to be admitted that many steps are being taken. As mentioned earlier, miners are chased from the old module to the new one, and similarly, Nam, users, will be more advantageous to use Eth 2.0.
Is Ethereum able to outdo Bitcoin?
There are more and more voices that Ethereum is able to dominate the cryptocurrency market. A few years ago, the value of bitcoin accounted for 90% of the entire market, and since May this year it has been less than 50%. Bitcoin, due to its size, is too powerful to modify, and too many people rely on it for its developers to risk updating. The way it works may never evolve to proof-of-stake.
Ethereum is developing much more dynamically than bitcoin, and it is on the basis of its ERC-20 protocol that giants such as BinanceCoin, Maker, Compound or SushiToken are created. Its uniqueness and functionality make it inspired by countless cryptos such as NFT (Non-FungibleToken), De-Fi (Decentralized Finance) and stablecoins. The 2020/2021 season attracts more and more fans to this blockchain and it is no wonder - even before the May crash, this cryptocurrency was unsurpassed.
It's like in the end: Ethereum or Bitcoin? The total capitalization of Ethereum is very large, however, it is still predicted to increase many times over. It is different with Bitcoin, which is simply lingering in relation to attractive altcoins. Its capitalization is so huge that only whales, the largest wallets, can affect it. Young investors who want to earn money quickly may feel unsatisfied with the development of bitcoin, as Dogecoin or Cardano can bring much higher profits. Ethereum offers much more attractive profits with a relatively low risk of loss. On the other hand, the Ethereum update can take this currency to a completely new level, beneficial for the investor.
Ethereum's value in relation to Bitcoin is constantly growing. The former increased almost twice as much as the latter during the current boom. There is less and less talk about cryptocurrencies that could be defeated by Ethereum. The only "Ethereum Killer" mentioned is Cardano, but even that has a very long way to go to dominate the market. It is more and more often said that Ethereum may be in the first place in Market Cap.
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