The viral meme which established Ethereum as the Ultra Sound Money is now circulating again on social media platforms. It has compared BTC as a sound money because of its limited supply system with Ethereum after the EIP-1559 upgrade and dubbed it as Ultra Sound Money also because it is gradually shifting on proof of stake algorithm and EIP-1559
A big core upgrade to Ethereum, the blockchain on which ether operates, the second-largest cryptocurrency after Bitcoin.
After the news of this upgrade, the price of ether hiked.it is now being traded above $3,000 as of Monday noon .Resultantly, other cryptocurrencies Like Rscoin is also surging to the mainstream surface.
What are EIPs?
EIP is an abbreviated form of Ethereum Improvement Proposal and a proper way of initiating changes to the Ethereum Network just like Bitcoin Improvement Proposals (BIPs) the main focus of EIPs are on the betterment of the technical details of Ethereum and are widely considered a technical document, that’s why EPIs are not discussed widely outside the specific hierarchy.
EIP-1559 is not a normal update or addition, it is an exceptionally efficient and result oriented EIP and directly effects the way how miners receive gas fee now called base payment and how the transactions are picked by the miners and how they receive the gas fee now called miner tip.
The basic goals of EIP-1559 are:
- Increasing the predictability of transaction fee.
- Decreasing the delay in the transaction.
- Betterment in user experience by automating the fee bidding system.
- Creating a healthy circle between Ethereum supply and demand.
Ethereum Improvement Proposal (EIP)
This upgrade is called London Fork, which includes Ethereum Improvement Proposal (EIP) 1559, which basically change the way how the old way of transaction fee system worked, including the gas fee estimation system.
FPA (First Price Model)
The old gas fee model is called the FPA (First Price Model) according to which: users bid for how much they can pay to the miner as a gas fee for adding their transactions in the block. That was on the propriety of the miners, and they ultimately choose the highest bids resultantly the lower bids have to wait for a long time.
EIP-1559 (new concept of base fee)
But under the EIP-1559 (new concept called base fee) this process is automated by adding an autonomous bidding system, which does not operate on the highest bidding system instead it operates on the basis of how congested the network is.
New Feature Miner Tip
According to EIP-1559, the minimum gas fee to be included in a lock is decided for all transactions. Miners can’t priorities the transactions according to the high bids, instead, there is another new feature called Miner Tip. In which users can offer a miner tip to the miners and miners can receive the total tip without paying any gas fee on it.
Instead of the first price bidding model, the Base Fee can be calculated on the factor that how congested the ether network is.
The model is if the network is running above the 50% capacity, then the base price will increase but if the system is running below the 50% capacity, then the base price will decrease. It also means that on 50% the base price will be balanced for all and that’s the core objective of this EIP. This feature is mostly applauded for its capacity to control the inflation and deflation of Ethereum supply.
Increase the Maximum block capacity
Another main aim is to increase the network capacity, it will be achieved by increasing the maximum gas limit per block, from 12.5 million to a 25million ultimately doubling the block size.
Another major change is that a part of every transaction fee will be burned without circulation, which will ultimately reduce the supply of ether and subsequently cause the price boost.
Crypto world has welcomed this update with positive market. Not only prominent cryptocurrencies but also other new emerging cryptocurrency to invest in 2021. has also improved firstly, because of the positive trend in the market and secondly because of its prof of stake algorithm and efficient software system.