Ethereum’s London, Berlin and Shanghai Forks and Their Role in Serenity

Ethereum (ETH) has had a good run so far in 2021, rising in value from around $ 1,300 at the start of the year to nearly $ 4,000 in May. Aside from the price of Ethereum, however, consistency issues in the Ethereum blockchain have highlighted the anger of traders and developers of decentralized applications (DApp) over the Ethereum ecosystem. Lack of scalability and high gas charges are the main problems.

As one of the largest decentralized application cryptocurrency platforms, Ethereum has resolved network congestion that reflects the high gas fees people pay per transaction. Since the beginning of the year, the cost of facilitating transactions in the Ethereum ecosystem has fluctuated between 16 and 20 US dollars at times, up to 100 US dollars for high-volume DApps such as Uniswap.

From this perspective, the transition to Ethereum 2.0 (Eth2) as a solution to solving scalability problems as well as solving the problem of exploding gas charges is a welcome welcome from the Ethereum community.

Eth2 or Serenity is said to be a technical upgrade that converts the Ethereum blockchain from a proof-of-work (PoW) protocol to a proof-of-stake (PoS) blockchain, thereby increasing its transaction capacity and making the network more scalable and Greener when generating new coins and validating transactions.

After years of implementation, the move to Eth2 began with the introduction of the beacon chain as the first step in revolutionizing the Ethereum network. The switch to the PoS blockchain will be one of the biggest updates in the life cycle of the Ethereum blockchain and will therefore take place in phases. The Ethereum London Hard Fork is one of the upgrades that will bring the Ethereum network closer to Serenity.

Berlin Cross

The Berlin upgrade went live on April 15 in Block 12,244,000. Berlin, named after the host city of the first Ethereum Devcon conference, is a forerunner of the larger London hard fork and includes four suggestions for improvement: Ethereum (EIP) for processing gas prices and new types of transactions.

The Berlin EIP-2565 deals with lowering gas fees for Ethereum. This mechanism uses a feature called Modular Exponentiation (ModExp) to help Ethereum users who need to perform services on the Ethereum network.

The EIP0-2718 protocol makes all transaction types backward compatible and thus easily adds new transaction logic to Ethereum. The developers who created this protocol used a new feature called Imported Transaction Envelopes.

The Berlin Hard Fork also has a proposal, titled EIP-2929, which suggests increasing gas prices on opcode transactions. In computers, optical codes are part of machine language that specifies operations. Ethereum opcodes have been a major pain point for Denial of Service (DoS) attacks in the past. With EIP-2929, higher gas costs remove the incentive for DoS attacks.

Finally, the Berlin hard fork has the EIP-2930 protocol, which is built on top of EIP-2718, which offers a new transaction mechanism that allows users to create a list of wallet addresses so they can transact with low gas fees.

Reaction to Berlin

The EIPs introduced with the Berlin Hard Fork aim to reduce gas costs at a time when grid saturation is peaking and to improve Ethereum’s efficiency. However, the update was delayed several times due to concerns about possible vulnerabilities due to the upgrade centralization.

In addition, there is agreement in the Ethereum community that Berlin will have less impact in the short term, but will still pave the way for the eagerly awaited London EIP 1559 protocol hard fork.

Hard Fork London: Increases the block elasticity

The Ethereum London hard fork is part of Ethereum’s roadmap for the Eth2 release. The long-awaited hard fork is expected to hit the market on August 4th in a previously delayed release that has been postponed to the end of July.

The Ethereum London hard fork will include five Ethereum Improvement Protocols. The most notable of the five EIPs are EIP-1559 and EIP-3554.

EIP-1559 introduces a new fee structure that makes Ethereum deflationary. Although controversial, this protocol change aims to burn some of the fees generated on the Ethereum blockchain, thereby reducing miners’ income.

On the other hand, EIP-3554 will make Ethereum mining more difficult and thus remove the incentive for miners to participate in the PoW network. The move is expected to encourage miners to join the new PoS blockchain while the proof-of-work network is frozen.

Ethereum miners respond to EIP-1559

While Ethereum users and investors are expecting the launch of EIP-1559 as it will help lower gas fees, ether miners are not thrilled with the proposal.

The much anticipated upgrade will put Ethereum on a deflationary path by burning up initial miner fees. EIP-1559 plans to set a flat fee for everyone on the Ethereum network so that no one has the option to pay more to have their transaction verified faster than others. The network automatically sets fees, which are then collected and burned from transactions, allowing for dynamic expansion and shrinking of block sizes.

For users who want to prioritize their transactions, this EIP-1559 upgrade includes an optional “priority fee” that serves as a tip to motivate miners to prioritize transactions. Miners can pocket this priority fee, but the base fee is burned.

According to James Beck, communications director at ConsenSys – a tech company that supports the Ethereum blockchain – burning the base fee will put deflationary pressure on ETH emissions.

While some have suggested that the deflationary mechanism of this upgrade will result in an explosion in ether price and a positive price feedback loop, some angry miners have criticized the move as it will significantly reduce their income.

In protest against the upcoming implementation, several Ethereum miners have expressed their desire to organize a 51-hour brute force attack on the Ethereum network, in which computing resources are directed to a pool that supports individual changes for the Ethereum network . The threats are now extinct, and Vitalik Buterin suggested a swift move to Eth2 as the solution.

The coming future of hard fork on Ethereum

The hard forks in London and Berlin are just the beginning of the suggestions for improving Ethereum before the network moves on to Eth2. After the hard fork in London, the Ethereum community will prepare for the hard fork in Shanghai, which is expected to start later this year.

The Shanghai Hard Fork is said to be the final step in the merger of Eth1 with Eth2. Happening to discuss The developers of hard forks from Shanghai suggest that the upgrade will take place in October 2021 and will only carry out the merger and not an additional feature for the upcoming Eth2 as with previous hard forks.

Overall, there is a mix of excitement and disappointment in the Ethereum community as some believe the move to the PoS blockchain will result in cheaper transaction costs, while others denounce the decline in the profitability of the Ethereum blockchain. It remains to be seen whether the upgrades will result in a quick and successful transition to Ethereum 2.0.