The Ethereum community has worked hard in recent years, laying the foundation for a departure from the current Proof of Work (PoW) algorithm, which until today has been the basis for blockchain operations.

Ethereum’s move to Proof of Stake (PoS -) chain Ethereum 2.0 is approaching reality as recent blockchain updates have led to the deflationary release of Ether (ETH).

Recent improvements have resulted in the deflationary issuance of ETH, where part of the transaction fee has been burned off in the extraction of new ETH. Some in the industry did not expect this to happen before the network upgrade to Ethereum 2 (Eth2). This is believed to be an important factor in the increase in the value of the underlying cryptocurrency in the coming months and years.

The impact of this earlier than expected transition to deflationary ETH issuance cannot be underestimated in terms of its impact on the value of ETH. Industry participants also believe that this reduction will increase after the transition of the entire network to Eth2, which is more than 10 times less than with the current emissions of 2 ETH per recovered block.

Recent improvements
Late last year, the foundation was laid for the move to Eth2 when the Proof of Stake beacon chain was launched, so that users could participate in Ethereum to become validators. This will significantly replace the role of existing miners using physical hardware to validate transactions, add new blocks and generally network maintenance.

From 17 November 2021, there are over 260,000 validators who have invested a minimum of 32 ETH required to become validators online. At the time of writing, the current supply of Ethereum tokens is 8,327,638, which is estimated at approximately $ 34.1 billion.

Ethereum’s value has had a steady upward trend in 2021 and has reached new heights this year, driven by a number of factors, including the huge popularity of the decentralized finance area (DeFi), much of which goes to the Ethereum blockchain.

The most anticipated update for 2021 was the London Hard Fork, which featured quite a few Ethereum Improvement Proposals (EIP). One particular proposal, EIP-1559, has sparked controversy over the restructuring of taxes that miners earn and pay users.

The sore spot was the built-in ETH firing mechanism that destroys some of the ether used to pay transaction fees. Ethereum miners were concerned ahead of the upgrade, as transaction fees are the driving force driving miners to support the network.

Related: Bitcoin Taproot Update improves the network as the impact on the BTC price may be limited

The significant upside of the London hard fork that took place in July 2021 was the deflation movement of the ETH firing mechanism. Each transaction now results in the destruction of a certain percentage of ETH, and gradually removes more ETH from the ecosystem, increasing the scarcity and value of ETH as an asset.

It was also promoted in London to see a drop in fees paid by users of the Ethereum network. This possibility was not fully realized as high fees continued to be a concern in November 2021. This has led some investors to wish to take advantage of multi-chain decentralized financial networks to lower the high transaction fees that are still being experienced. on Ethereum’s core network.

The latest update to the Ethereum network after London was made as Altair. Tim Peko, Ethereum Foundation Community Manager for Cointelegraph, told Cointelegraph that Altair was the first Beacon Chain update since its launch in December 2020. According to him, the update was a test of consolidation and also served the purpose of leveling incentives for validators:

The update brought the sanctions that validators receive if they offer invalid blocks or are disconnected from the network, to their “real” levels. When Beacon Chain was launched, these penalties were lowered to be milder for speculators in the early days. that everything works reliably, it is time to bring the sanctions to their true level. ”
Ben Edgington, the main owner of Teku, an Eth2 client created by ConsenSys, also looked at the details of Altair’s update: “We have not done this before and we wanted to make sure everything went well before we did the big update when we went to Proof of Stake. “Things went very smoothly and we are confident that we can coordinate future updates,” he added.

Edgington highlighted some significant changes to Altair, while acknowledging that most of these updates are general improvements that may not be visible to contractors.

Sync charges were introduced as an improvement that would allow light clients to sync seamlessly, Eddington said.

Source: CoinTelegraph

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