What Is EIP-1559 and Why Should Ethereum Be Burned?
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What is EIP-1559 and Why Ethereum Shall Burn?

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What is EIP-1559 and Why Ethereum Shall Burn?

Apa Itu EIP-1559 dan Mengapa Ethereum Harus di Burn?

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Ethereum will upgrade by burn. This upgrade is also known as the EIP-1559 upgrade.

Ethereum is a crypto asset that was created by Vitalik Buterin in 2015. ETH was created to complement Bitcoin. This crypto exists as a container or network for the birth of new crypto assets. Ethereum which owns ERC20 gave birth to many crypto assets that were born under it. Ethereum has also successfully won the attention of crypto activists around the world.

Now, Ethereum is the number 2 favorite crypto asset. It only loses to Bitcoin. Why is that? For one reason, which is an unlimited supply.

Bitcoin is only created at most 21 million BTC (units of Bitcoin). Whereas Ethereum has no limit or supply limit. Because Ethereum is indeed used as a payment tool or gas fee on the ERC20 network. This is what makes Bitcoin seem irreplaceable. Because if an asset has a small or limited supply, then its future price can increase. Meanwhile, Ethereum which has no boundaries it difficult to beat Bitcoin’s reputation.

EIP-1559 to Limit Ethereum Supply

However, Ethereum continues to improve by upgrading. One of the goals in this innovation is to reduce the maximum supply of Ethereum in the future.

One such upgrade is the EIP-1159. This allows each gas fee Ethereum payment to be burned or “burnt” or partially destroyed. Thus, the supply may decrease in the future.

Although only a small portion of the Ethereum supply will be destroyed at EIP-1559, this could certainly reduce supply in the future.

The Ethereum developer has confirmed this. The upgrade can be carried out in July or August 2021. Although, it is not certain how much Ethereum supply was reduced in this EIP-1559.

Ethereum ‘Burn’ to Increase Prices

One of the things that makes people interested in Bitcoin is because of its limited supply. Bitocin’s maximum supply is only 21.5 million. Currently, around 18.5 million have been circulated. Bitcoin is getting stronger because it is difficult to mine. Due to the halving day or reduction in supply that takes place every 4 years, starting from 2012.

Ethereum is not the case with Ethereum. Because all this time, Ethereum was created infinitely. So, many people still doubt Ehterum and still believe more in Bitcoin. Ethereum can still be mined. The concern of people because the supply is unlimited is that the price will not experience inflation or increase in prices.

So, Ethereum has to burn or burn to reduce its supply.

Upgrading Ethereum Still Reaping Pros and Cons

Unfortunately, this upgrade still reaps the pros and cons of the Eteherum miners or the Ethereum developers themselves. Ethereum is an open source project that is held by many miners around the world.

They are the groups or people who benefit from the Ethereum gas fee. Meanwhile, Ethereum will reduce the gas fee price in EIP-1559. Many of them will carry out protests such as a mining strike. However, this has not yielded any results against EIP-1559 and Ethereum price.

Relax, we won’t run out of Ethereum

Ethereum returns to its highest level of IDR26 million on March 12, 2021. In a bit, Ethereum will break its historical high of IDR26.8 million, which occurred in February 2021.

If EIP-1559 does happen, then chances are, Ethereum’s price will increase dramatically. Even though the supply is reduced, the price will actually increase.

Then, if the supply of Ethereum decreases, can’t we get Ethereum? We can still get Ethereum.

Because Ethereum is like Bitcoin. Even though the supply is limited and the prices are exorbitant, we can still have both. Ethereum, like Bitcoin, can be transacted with a decimal of 0.000000001 or only Rp.10 thousand.

Make sure you have saved Ethereum by trading on Indodax.com

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