[Wise Crypto Life] 16. Ethereum Hard Fork

 

[Wise Crypto Life] 16. Ethereum Hard Fork

Date: Aug. 12, 2021, 09:30 AM KST

[Wise Crypto Life] 16. Ethereum Hard Fork

Ethereum’s heavily anticipated ‘London’ Hard Fork was activated this month. A hard fork refers to a network change that splits a previously existing chain into two, while making former invalid blocks and transactions valid, or vice versa. The biggest benefit of a hard fork update is that it enables the network to process more transactions per second. In this Wise Crypto Life edition, we will go into depth about what a Hard Fork update consists of.

Hard Fork/Soft Fork

In blockchain technology, blocks containing ledgers are continuously added and connected to existing blocks, and when a ‘fork’ takes place, new blocks with new data are added to existing blocks.

A ‘fork’ is the same concept as an ‘update’ as its purpose is to upgrade and enhance the current version.

As our readers may know, there are two types of forks; soft and hard. They are similar in the sense that when the platform’s existing code is changed, both old and new versions of the blocks remain in the network.

However, a "soft fork" is an update that only supplements the existing rules of node communication. This means that upgraded nodes can still communicate with the old nodes as they don’t clash with the older rules.

‘Hard forks’, on the other hand, are backward-incompatible software updates. The updates that occur during hard forks fundamentally change the rules of node communication, so that new nodes can only communicate with other new nodes.

Ethereum has undergone 11 hard forks thus far, with Ethereum Classic having been created during the 2016 Ethereum hard fork for the sake of keeping existing chains.

Ethereum's 11th Hard Fork

The newest update, the ‘London’ hard fork, aims to tackle the unpredictable gas fee issue by algorithmically deciding the transaction fee based upon overall demand in the network instead of holding a “blind auction”.

Additionally, the result of a successful hard fork promises an ‘Ethereum 2.0’, boasting reduction of transaction fees, quicker transaction speeds, different mining method (from Proof of Work (PoW) to Proof of Stake (PoS)), and reduction of electricity consumption.

The future of Ethereum looks bright as users are developing further trust and investing into the network with these advanced measures taking place.