The Ethereum Improvement Proposal 1559, which goes live on August 4, is expected to simplify the blockchain network’s fee structure and make it easier to use it for transactions
Ethereum prices are expected to receive a boost next week when a revamp of the cryptocurrency’s underlying blockchain network goes live next Wednesday.
The Ethereum Improvement Proposal (EIP) 1559 is a software upgrade that will fundamentally alter how the network processes transactions, mainly by providing clear fee pricing paid to miners for validating transactions and taking a small amount of the tokens out of circulation in a process known as ‘burning’.
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Clarifying the fee structure will mark a huge change to Ethereum’s current set-up, where transaction costs are unclear with almost no way of knowing the price of a transaction beforehand. Instead, the upgrade will introduce a base fee paid to miners for every transaction, part of which will be burned, as well the option for users to pay a ‘tip’ to speed up the process.
The upgrade is expected to reduce the inflation rate for Ethereum, as well as increase transactions using the network and in turn increase the use of the crypto more widely, potentially attracting more investor interest.
Some analysts are also expecting sharp rises in the value of the crypto as a result, with Andrew Keys at DARMA Capital telling Reuters that the price of Ethereum has yet to incorporate the upgrade and could “easily quintuple” by next year.
However, the market was showing signs of increased interest in late morning trading in London on Friday, with Ethereum prices up 2.2% in the last 24 hours at US$2,358.