The most awaited massive 'Ethereum London Hard Fork' update went live on Thursday evening. It is expected to make significant changes to Ethereum's transaction fee system and fix the problem of scalability to a great extent.
Over time, the average fee paid by Ethereum users had become too costly for small transactions. For an instance, if the network fee is around $20 (USD), sending $20 worth of Ether (ETH) or another digital asset is not worth it, says a report by academy.Binance.com. The high fees made the network less attractive.
Previously, users entered a bid to pay their gas fees. Miners would prioritise transactions based on the fee added and use the fee as a reward for adding it to a block. Now, each block will have a fixed, associated fee instead, explains the Binance report.
The problem of scalability is another major challenge for the world's second-largest cryptocurrency network. As per experts, currently, the world's second-largest crypto network can manage up to around 15 transactions per second. Ethereum's London update is expected to enable the network to handle many more transactions per second.
The massive upgrade to the Ethereum blockchain is a huge positive for the ETH token, say crypto experts. Ethereum has already witnessed a rally as it shot up approximately 40 per cent from the recent lows. In the last 24 hours, it is up by 4 per cent. Ethereum price has surged by over 20 per cent in the last seven days.
While the investors and the industry are excited about the upgrade, experts expect ETH to enter a consolidation phase soon. "ETH had an almost vertical price rise, and this eventually subsided. ETH is likely to enter a consolidation, which would be a great time to accumulate more," says Edul Patel, CEO & Co-founder, Mudrex. "Buy on dips is a worthy strategy in Ethereum," he adds.
However, Patel believes we are still far away from the previous all-time high in Ethereum, hence a prudent strategy for all long-term investors would be to hold on to their ETH holdings now.
In May, Ethereum reached its all-time high price of $4,360. Going by the current market price, it is still 35 per cent down from the highest levels. While there is a lot of potentials for ETH to rally from the current levels, industry experts believe the timeline for this rally to occur can range from medium-term to long-term. Edul Patel cautions investors against buying more at this time. He says, "Markets are fired up, and this might not be a good time to buy more."
Copyright©2022 Living Media India Limited. For reprint rights: Syndications Today