Rising gas costs have been proving hugely problematic for this major blockchain.
Ethereum’s long-awaited Berlin upgrade has gone live — with hopes that the hard fork will help tackle surging transaction fees that have been triggered by the triple threat of DeFi, nonfungible tokens and a raging bull market.
Rising gas costs have been proving hugely problematic for this major blockchain. Not only do they render a number of applications unusable because transactions are impractically expensive, but it has caused developers to flock to “Ethereum killer” rivals such as Binance Smart Chain, Polkadot and Cardano.
What is the Berlin Upgrade?
Four Ethereum Improvement Proposals (EIPs) are included in the Berlin upgrade, which went live at block number 12,244,000. They are set to offer slight relief on fees — and crucially, crypto enthusiasts might be able to make savings by combining their transactions.
All of this sets the stages for some even bigger changes that are afoot. One of them is EIP-1559, which could make its debut in July. This proposal is controversial because it would actually put the network in control of setting fees — and miners won’t end up receiving this revenue.
But the most significant milestone of all remains some time off: the launch of Ethereum 2.0. This ambitious upgrade will see the entire blockchain make the switch to a Proof-of-Stake consensus mechanism, with sharding mechanisms ensuring that greater numbers of transactions can be processed in parallel. This should dramatically reduce congestion, could help futureproof the network, and will likely make fees more predictable.
Although there is some resistance to the changes that are being made, especially in the mining community, all of these developments could end up being bullish for Ethereum prices. They have the potential to lure developers back to the blockchain, and ensure that the network is affordable for everyone to use.
Optimism surrounding the Berlin upgrade has been reflected in Ethereum’s price. At the time of writing, it’s up 4% on the day and 21.65% over the past seven days — taking it to $2,468.41. At one point on Thursday, it broke a new record after reaching $2,489.49.
