Ethereum EIP-1559: London Hard Fork Release Date, Meaning, And What EIP-1559 Will Do For Mining ETH

Ethereum is set to go through a lot of changes in the future, first with the London hard fork introducing EIP-1559.

EIP-1559 is an Ethereum Improvement Proposal that, along with four other EIPs, will signal the start of Ethereum's 'Triple Halvening' event.

Here's all you need to know about EIP-1559.

EIP-1559 London Hard Fork Release Date

The current date for EIP-1559's release is set for August 5, 2021. Specifically, the update will occur at block 12,965,000, expected to take place at 11:55 AM UTC/12:55 PM BST/7:55 AM ET/4:55 AM PT.

From 11:45 AM UTC, Binance has announced it will temporarily suspend ETH and ERC-20 token withdrawals and deposits until after the hard fork occurs.

The Ethereum core developers had previously wanted EIP-1559 to release on July 14. However, as specified by Tim Beiko on GitHub, the proposed date shifted to account for the upcoming difficulty bomb.

On 6 July, Beiko submitted a pull request for the mainnet activation of the London upgrade at block 12,965,000. This date has now been confirmed.

The London hardfork is currently live on the three Ethereum testnets, following Rinkeby's upgrade on July 7.

After an invalid transaction bug caused issues on Ropsten on July 21, whispers of a delayed release started to circle, but this has since been refuted by the Ethereum team. Posting an update on the Ethereum Blog, the team stated:

The block number for London is unchanged, and still is 12 965 000. Node operators using an affected client MUST upgrade to the latest version.

Ethereum is not the only cryptocurrency to go through updates this year. Cardano's Smart Contract upgrade and the bitcoin Taproot upgrade are both slated for 2021.

What Does EIP-1559 Mean?

EIP-1559 is an upgrade that forms part of the London hard fork. It will introduce a minimum payment - the base gas fee- for Ethereum transactions, aiming to stabilise transaction fees. Depending on the network congestion, the base fee may adjust by up to 12.5%/

Previously, transaction fees stem from a 'first-price auction' system. Users would send bids for miners to choose from, with the highest bids - or gas prices - being chosen.

While there is a base fee, users also can choose to 'tip' miners with a priority fee. This will give their transactions a higher chance of completion in the next block.

This 'tip' is then given to the Ethereum miner, while the base fee is burned, removing it from circulation. In explaining the reason for this burn, EIP's authors said:

This ensures that only ETH can ever be used to pay for transactions on Ethereum, cementing the economic value of ETH within the Ethereum platform and reducing risks associated with miner extractable value (MEV). Additionally, this burn counterbalances Ethereum inflation while still giving the block reward and priority fee to miners. Finally, ensuring the miner of a block does not receive the base fee is important because it removes miner incentive to manipulate the fee in order to extract more fees from users.

What Will EIP-1559 Do For Ethereum Miners?

A collection of Ethereum miners and mining pools have voiced their opposition to EIP-1559. This has been collated in the #STOPEIP1559 petition, led by Flexpool.

Explaining their opposition, the petition states: "[Burning transaction fees] dramatically reduces miners' earnings, people who invested their savings into supporting the Ethereum network."

Given EIP-1559 is yet to launch onto the mainnet, the reward changes for miners are currently only predictions, with the full impact unknown.

Of course, no matter the miners animosity to EIP-1559, this is a smaller change in comparison to the impact Ethereum 2.0 will have. The Eth2 upgrade, slated for release in 2022, will see a full shift to Ethereum staking via a Proof-of-Stake algorithm.

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[Featured Photo by Executium on Unsplash]