The most anticipated massive “Ethereum London Hard Fork” update went live on Thursday evening. It is expected to make some significant changes to Ethereum’s transaction fee system and largely solve the scalability issue.
Over time, the average fees paid by Ethereum users had become too expensive for small transactions. For example, if the network charge is around $ 20 (USD), then sending $ 20 worth of Ether (ETH) or other digital asset is not worth it, according to a report from academy.Binance.com. The high fees made the network less attractive.
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Previously, users would bid to pay their gas costs. Miners would prioritize transactions based on the fees added and use the fees as a reward for adding them to a block. Now, each block will instead have an associated fixed fee, the Binance report explains.
The issue of scalability is another major challenge for the world’s second largest cryptocurrency network. According to experts, currently the second largest crypto network in the world can handle up to about 15 transactions per second. The Ethereum update in London is expected to allow the network to handle significantly more transactions per second.
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The massive upgrade of the Ethereum blockchain is a huge benefit for the ETH token, according to crypto experts. Ethereum has already seen a rally as it has climbed around 40% from recent lows. In the last 24 hours it has increased by 4%. The price of Ethereum has jumped over 20% in the past seven days.
While investors and industry are excited about the upgrade, experts expect ETH to enter a consolidation phase soon. âETH saw an almost vertical rise in prices, and it ended up easing. ETH is likely to enter a consolidation, which would be a great time to accumulate more, âsaid Edul Patel, CEO and co-founder of Mudrex. âBuying on dips is a valid strategy in Ethereum,â he adds.
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However, Patel believes that we are still a long way from Ethereum’s previous all-time high, therefore a prudent strategy for all long-term investors would be to hold onto their ETH holdings now.
In May, Ethereum hit its all-time high of $ 4,360. Based on the current market price, it is still 35% lower than the highest levels. While there are plenty of opportunities for ETH to recover from current levels, industry experts believe the timeline for this recovery may be medium to long term. Edul Patel advises investors against buying more at this time. He says, “The markets are boosted, and now might not be a good time to buy more.”
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