Ethereum has been under Bitcoin’s shadow for pretty much its entire lifespan. It also has its fair share of technical challenges, which over the years have turned into a sort of a meme. We, at Codetract consider Ethereum the best and most well-rounded smart contract platform for a reason. This is why our platform will offer you the best technical information and possible implementation solutions if you choose the Ethereum smart contract platform.
Earlier this month, the developers have released the “EIP-1559” (Ethereum Improvement Proposal), also known as the “London hard fork”, which brings changes to the way transaction fees, known as “gas fees” are estimated.
One of the most frustrating things for users was the bidding system and this is where the EIP-1559 comes in. Before, users had to bid with the amount they were willing to pay to have their transaction picked up by a miner. This was incredibly costly, but after EIP-1559 went live, the entire process is now handled by an automated bidding system with a preset fee amount that changes depending on the network congestion.
With the fees to miners being destroyed or “burned”, Ethereum is also reducing its own supply. Roughly 3 million ETH will now be removed from circulation each year. So what does that mean in numbers exactly? To put things into perspective, the current circulating supply of ETH is 113 million according to the latest data.
Even though we believe Ethereum is the best smart contract platform out there, we are will always give the best possible information to our customers. Despite the Ethereum platform’s countless advantages, there are unfortunately drawbacks. As this is the simple truth, we realize that Ethereum might not be the best platform for every single project. There are alternatives and if our team of experts sees that this is the case for your project, we will do our best to point you at the right direction.
Of course, with every upgrade there is a risk involved. When it comes to the EIP-1559, payouts to miners, facing lower earnings for their work can become an issue. After all, miners went from taking 100% of the transaction fees to “barely” receiving tips from the users via the “inclusion fee”.
This is where most experts point out that the application of the EIP-1559 will differ in theory and reality. The inability to produce the promised fee-market efficiency, might propel user and developer disappointment. As it stands with all markets, if the London hard fork proves to be insufficient to both users and developers, competitors such as Stellar, Cardano and Binance Smart Chain will instantly attempt to salvage what they can.
For the ordinary user, Ethereum should realistically become cheaper, but that’s not all. With 3 million ETH being removed from circulation each year, users’ ETH coins will become rarer and thus more valuable. With 6 million additional coins being removed from circulation via Ethereum 2.0 staking, this is only good news for users. This is why we, at Codetract, also offer many different services related to trading and storing ETH.