191 Interactions, 6 Today
A software change that burns ETH rather than utilising it to pay miners has removed $400 million ETH from circulation.
Over $400 million in ETH has now been destroyed by a network upgrade that destroys transaction fees rather than distributing them to miners. Each hour, around 200 ETH ($643,000) is burned.
The milestone was reached about 10 a.m. UTC on Sunday, when the Ethereum blockchain removed 124,865 ETH from circulation.
EIP-1559, the update that burns the ETH, went into effect on August 5. It aimed to moderate Ethereum’s variable transaction costs and speed the transition to Ethereum 2.0, the Ethereum blockchain’s next generation.
The busiest day for ETH burning since EIP-1559 went into effect was August 27, when the network removed 11,176 ETH ($35.8 million) from circulation. The busy day corresponded with hefty transaction fees, with average fees reaching $38.3.
Mining on Ethereum 1.0 becomes significantly less profitable as a result of IP-1559, as fees puff up in smoke instead of flowing to the miners who validate transactions. Miners can still be paid to speed up transactions, but only if customers tip them.
Ethereum 2.0 does away with miners entirely, in favour of proof-of-stake “validators.” The Ethereum blockchain is likely to convert to proof-of-stake before the end of the year or early next year.
Ethereum 2.0 will alter how Ethereum transactions are handled. Miners with the most powerful computers are granted the right to validate transactions under Ethereum 1.0’s proof-of-work method.
Validators get the ability to validate transactions under ETH 2.0’s proof-of-stake scheme if they commit the most ETH. Ethereum 2.0, according to the Ethereum Foundation, will be 99.5 percent more ecologically friendly.