Ethereum miners will hold a rally against EIP-1559

On April 1, miners on the Ethereum network will pool the hashrate in the Ethermine pool, which opposes the implementation of the EIP-1559 proposal. The promotion will last 51 hours.

Ethereum Miners on April 1st, what’s this move about?

– Red Panda Mining (@RedPandaMining) March 8, 2021

EIP-1559 aims to replace the existing bid-based fee market with a fixed price and incineration mechanism. The offer will be part of the London hard fork planned for July . 

In February, Ethereum miners’ revenues from transaction validation jumped 122.1% compared to January. The share of commissions received was 52.9% of total revenue, which reached a record $ 1.36 billion.

EIP-1559 divided mining pools into two camps . Ethermine and SparkPool opposed it, which together with a number of other participants provide 60% of the network hashrate.

“For educational purposes” opponents of the proposal plan to channel computing power into Ethermine. If they manage to collect more than 51% of the hash rate, then hypothetically, miners will be able to make one-way changes to the protocol.

“This is a demonstration of the strength and ability of miners to coordinate actions, and not a willingness to attack the network, there is no such task. This is a demonstration of a situation where a potential attacker will raise a price question. He can rent large amounts of hashrate and create the risk of re-spending or reorganization of blocks, ” explained Michael Carter, creator of the mining blog Bits Be Trippin.

Supporters of EIP-1559 believe that its implementation could reduce the overall market supply of Ethereum and, as a result, lead to an increase in the price of the coin.

“If demand is high enough, in fact more Ethereum will be destroyed than created. I sometimes joke: if bitcoin with its limited emission is a stable currency, will this apply to us in the event of a declining supply? ” –  Asked the co-founder of the second largest cryptocurrency by capitalization Vitalik Buterin.

Recall that the Berlin update on the Ethereum network is scheduled for block 12,244,000, which will be mined on April 14th. The final version contains a change in the gas price calculation algorithm ( EIP-2565 and EIP-2929 ), as well as new types of transactions ( EIP-2930 and EIP-2718 ).

Leave a comment