Ethereum’s latest hard fork, London, Went live today and made several changes to prepare for the long-term success of cryptocurrencies.But especially a change may greatly reduce profitability Ethereum mining In progress.
Ethereum Improvement Proposal (EIP) 1559 Several changes have been made to ETH transactions that benefit cryptocurrency users rather than miners.The first is to introduce an algorithm to determine Basic cost of burning-This means that it is permanently removed from circulation after the transaction is completed.
The basic fees introduced by EIP 1559 can be supplemented by priority fees, and transactions can serve as incentives for miners to join their blocks. However, transactions can also set a maximum fee, which means they only pay priority fees if they don’t exceed the amount they are willing to spend. (The basic fee is always paid.) Here is how the author of EIP 1559 explained the purpose of the proposal:
“This ensures that only ETH can be used to pay for transactions on Ethereum, consolidates the economic value of ETH in the Ethereum platform, and reduces the risks associated with miner extractable value (MEV). In addition, this burning offsets the ether Square inflation, while still granting block rewards and priority fees to miners. Finally, it’s important to ensure that block miners don’t charge basic fees because it eliminates the incentive for miners to manipulate fees to extract more fees from users.”
You can see that the burning of ETH started at Block 12,965,000, But since this was the first block after the switch, only 0.03 ETH was burned.What’s more interesting is the running total, which you can see at the top Etherscan.io block listAt the time of writing, less than 900 blocks after the launch of the London fork, approximately 760 ETH have been burned—that is, destroyed. If you want to know, it is a cryptocurrency worth more than $2,000,000.
We also performed some quick calculations to understand how the London fork affects mining rewards. Before the fork, viewing 100 blocks (12,964,992 to 12,964,893), the average block reward was 2.581 ETH. After the fork, looking at another set of 100 blocks (12,965,779 to 12,965,680), the average reward dropped to 2.234 ETH. This is “only” a difference of 0.347 ETH, but in the long run, it is still about 15% lower than the miner’s profit. Potential shared profits of approximately USD 280,000 per hour will no longer be available.
The unrest before the proof-of-stake storm
This change effectively reduced the short-term profitability associated with mining, in exchange for a substantial improvement in the Ethereum platform. But this is not the only threat to miners’ profits-the network plans to shift from proof of work to using the Ethereum 2.0 proof of stake model and is ready to avoid mining.
along with Proof of work In the model, Ethereum miners are responsible for “a mechanism that allows the decentralized Ethereum network to reach consensus or reach consensus on matters such as account balances and transaction sequence,” Ethereum.org said.This Proof of stock The model transfers this responsibility from the miner to the ETH owner.
NBC Finance Channel Report “In a few years, once the protocol is fully migrated to the proof-of-stake model, the entire industry surrounding the Ethereum mining that exists today will no longer be relevant.” Before that, Ethereum miners had a clear motivation to do as much as possible. Profitable; EIP-1559 directly hinders these efforts.
The report also pointed out that the London hard fork introduced another change, EIP-3554, To remind people that they are about to move to the proof-of-stake model. EIP-3554 is a self-described “difficulty bomb” that will allow mining clients to “calculate the difficulty based on the fake block number and suggest to the client that the difficulty bomb is adjusted 9,700,000 blocks later than the actual block number”.
James Hancock, the author of EIP-3554, stated that the goal of the difficulty bomb is “Shanghai upgrade and/or merger will happen before December 2021”, and once it happens, “it can be re-adjusted at that time or removed together.” (Shanghai is the code name assigned to the next hard fork of Ethereum.)
All of this means that Ethereum miners are watching basic fees ruin their profits, the difficulty bomb may greatly reduce the effectiveness of their mining work, and the shift to the proof-of-stake model makes them irrelevant.Maybe this means that fans will finally be able to Buy a graphics card at a retail store.
We suspect that those who manage to grab the GPU will be satisfied with the plight of the miners. They will not find much comfort elsewhere, because so far, the market has responded positively to the London hard fork. CoinDesk data At the time of writing, the price of ETH is approximately $2,800, which is approximately 6% higher than yesterday.