1/ What is EIP-1559 and why are $ETH holders so excited about it? A detailed thread👇
Before we dig into EIP-1559, we must first understand what’s an EIP.
#Ethereum is largely decided by submissions put forward by the community that maintains the network.
Before we dig into EIP-1559, we must first understand what’s an EIP.
#Ethereum is largely decided by submissions put forward by the community that maintains the network.
2/ These submissions are called Ethereum Improvement Proposals.
Typically a developer group submits a change to the network that is reviewed and debated by the core devs who manage the Ethereum code repository on Github.
Typically a developer group submits a change to the network that is reviewed and debated by the core devs who manage the Ethereum code repository on Github.
3/ If the EIP is accepted, it’s usually bundled with other improvements in broader network upgrades, called hard forks.
The latest hard fork was the Berlin hard fork. It had several security improvements and new types of transactions.
So how did EIP-1559 come about?
The latest hard fork was the Berlin hard fork. It had several security improvements and new types of transactions.
So how did EIP-1559 come about?
4/ EIP-1559 was co-authored by @VitalikButerin and @econoar back in April 2019.
It was designed to make transactions on #Ethereum more efficient.
Currently, Ethereum has an auction system that determines which transactions are bundled inside what blocks.
It was designed to make transactions on #Ethereum more efficient.
Currently, Ethereum has an auction system that determines which transactions are bundled inside what blocks.
5/ The more a user is willing to pay, the more likely a miner will include it in a transaction.
So the busier the network, the higher the fee. This means users have to take in account network congestion when estimating the total cost of moving data around the network.
So the busier the network, the higher the fee. This means users have to take in account network congestion when estimating the total cost of moving data around the network.
6/ By moving to EIP-1559, the current system will be replaced by a fee structure that is priced automatically by the network.
Plus, a tip system will be introduced that will allow people who wants their transaction verified faster to pay a miner to do so.
Plus, a tip system will be introduced that will allow people who wants their transaction verified faster to pay a miner to do so.
7/ By implementing this, EIP-1559 will reduce the uncertainty of Ethereum transaction costs by providing very accurate gas estimations.
But there’s also another impact EIP-1559 will have on the network, burning ETH 🔥
But there’s also another impact EIP-1559 will have on the network, burning ETH 🔥
8/ This design has been dubbed “Ethereum’s scarcity engine”.
This is because the base transaction fee a user pays to transact is sent to the network and burnt instead of going directly to a miner.
Thus reducing the Ethereum supply and making ETH deflationary.
This is because the base transaction fee a user pays to transact is sent to the network and burnt instead of going directly to a miner.
Thus reducing the Ethereum supply and making ETH deflationary.
9/ The ETH community has been very excited about the possibility of a reduction in issuance.
It will be much like Bitcoin’s halving events, which take place every 4 years.
EIP-1559 is a key piece in the Ultra Sound Money narrative and makes for many great memes along the way.
It will be much like Bitcoin’s halving events, which take place every 4 years.
EIP-1559 is a key piece in the Ultra Sound Money narrative and makes for many great memes along the way.
10/ Hopefully this thread will help everyone better understand EIP-1559 and how big it will be for the entire Ethereum ecosystem.
I wanted to make a thread to give back, because the ETH community has been great and helped me learn so much along the way.
I wanted to make a thread to give back, because the ETH community has been great and helped me learn so much along the way.
11/ Lastly, there’s great people in the ETH ecosystem who know so much more than I do. Make sure to check them out ⬇️
@VitalikButerin @econoar @sassal0x @TimBeiko @benjaminion_xyz @protolambda @vdWijden @trent_vanepps @iamDCinvestor @RyanSAdams @TrustlessState @antiprosynth
@VitalikButerin @econoar @sassal0x @TimBeiko @benjaminion_xyz @protolambda @vdWijden @trent_vanepps @iamDCinvestor @RyanSAdams @TrustlessState @antiprosynth
12/ If I left out any other Ethereum community members or resources, please add them in the comments below.
And remember, ETH is truly the most Ultra Sound Money the world has ever seen.
And remember, ETH is truly the most Ultra Sound Money the world has ever seen.
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