What Is Ethereum London Hard Fork?

What Is Ethereum London Hard Fork?

The Ethereum London hard fork has significantly altered the blockchain's transaction fee structure and difficulty time bomb. A fundamental modification now establishes transaction fees through a base fee per block, eliminating the previous practice of bidding on gas prices. In conjunction with the launch of Ethereum 2.0, developers made the deliberate decision to postpone a premeditated event known as the difficulty time bomb. This strategic move aimed to incentivize miners to transition from Proof of Work (PoW) to Proof of Stake (PoS) consensus mechanism.


In the wake of the Berlin hard fork in April 2021, Ethereum's blockchain underwent another transformative update known as the London hard fork. This update not only tackled the long-debated issue of transaction fees but also laid the groundwork for the impending Ethereum 2.0 release, introducing modifications to its consensus model. The London hard fork has sparked controversy among certain circles, mainly due to its significant impact on cryptocurrency transaction fees and mining operations. 

What Is the Ethereum London Update?

The Ethereum London update, implemented through a hard fork, introduces two Ethereum Improvement Proposals (EIP). The London update laid the groundwork for transitioning to the Proof of Stake consensus mechanism in 2022. Notably, miners experienced a reduction in mining difficulty before Serenity release. To continue mining and validating, all nodes were required to adopt the new rules and the latest version.

The most noteworthy modification centers around transaction fees, incorporating a novel deflationary mechanism. Previously, users would bid on gas fees, and miners would prioritize transactions based on the fee offered, receiving it as a reward for including the transaction in a block. However, in the London update, each block now features a predetermined, fixed fee. This pivotal change is a result of EIP-1559, which was implemented alongside EIP-3238 in the London update.

Understanding EIP: Driving Innovation in the Ethereum Blockchain

Ethereum Improvement Proposals (EIP) are crucial technical blueprints for introducing new functionalities to the Ethereum blockchain. These proposals are crafted by developers in collaboration with suggestions from the Ethereum community, creating an inclusive environment where anyone can contribute their EIP for community deliberation and acceptance.

Each EIP adheres to the guidelines outlined in EIP1, encompassing a concise technical specification of the proposed feature along with a well-founded rationale. The EIP author assumes the responsibility of fostering consensus among the community while also documenting dissenting viewpoints.

To approve an EIP, authors undergo a systematic process that involves peer review and drafting stages. Once the community reaches a consensus and embraces the proposal, it becomes eligible for inclusion in a future release.

EIP-1559: Transforming Ethereum's Gas Fee Structure

EIP-1559 significantly shifted how gas fees are paid on the Ethereum network. This proposal, spearheaded by Ethereum's founder, Vitalik Buterin, and a team of dedicated developers, addressed the issue of escalating fees for small transactions that have made the network less accessible, especially for newcomers.

The core concept of EIP-1559 introduced a novel transaction pricing mechanism, where each block has a base fee. Crucially, this base fee is burned, effectively reducing the overall supply of ETH and generating deflationary pressure for the cryptocurrency.

To maintain equilibrium, the base fee dynamically adjusts in response to network demand. If a block exceeds 50% capacity, the base fee rises, and vice versa, ensuring a balance between blocks' utilization.

Additionally, users can include a tip for miners as an incentive to prioritize their transactions. However, even without tips, Ethereum aims to keep blocks around 50% capacity, allowing even small tips to expedite the transaction process.

EIP-3238: Delaying Ethereum's Difficulty Time Bomb

The Ethereum network has a time bomb that makes mining more challenging over time. However, if left unchecked, this time bomb would activate prematurely, resulting in sluggish transactions and reduced miner profitability. Developers strived to ensure a smooth transition from Ethereum 1.0 to Ethereum 2.0 by compelling miners to adopt the new Proof of Stake consensus model upon release.

To align the network with the optimal timing for encouraging validators to migrate to Ethereum 2.0, EIP-3238 intervened by postponing the difficulty time bomb. This essential adjustment mitigated the risk of miners persisting with Ethereum 1.0, reminiscent of the Ethereum and Ethereum Classic split. 

Community Opinion on the London Network Upgrade

The opinions within the community regarding the London network upgrade have been diverse, primarily centered around transaction fees. This update has significantly reshaped the fee structure, impacting miners' profitability. Moreover, concerns arise regarding the potential centralization of Ethereum mining, with arguments suggesting that only the largest miners boasting low energy costs can remain profitable.

While the precise outcome remains uncertain, there is speculation that the deflationary mechanisms implemented could contribute to an increase in the price of ETH. This anticipation stems from the fact that Ethereum has commenced burning the ETH base fee for all transactions on the blockchain.

Implications of the London Update for Users

Transaction fees in Ethereum, much like Bitcoin, used to operate on a bidding system. Before, the higher the fee (or gas cost) you offered, the greater the likelihood of your transaction being swiftly validated by miners. However, with the implementation of the London update, users are no longer required to select the gas price for Ethereum transactions manually.

Under the new system, users will simply observe a base fee, along with the option to tip miners. Nonetheless, it's essential to note that the base fee may fluctuate between the moment of a transaction submission and its addition to a block. To mitigate this uncertainty, users can establish a fee cap, specifying the maximum amount they are willing to pay. If a miner incorporates the transaction into a block where the base fee is lower than the set fee cap, the network will refund the excess amount.


London introduced substantial improvements in how users engage with Ethereum, distinguishing it as a significant update. Previous updates have substantially modified underlying systems, typically unseen by Ethereum users. As a result of the London update, the probability of reduced transaction costs and faster processing times has significantly increased, although outcomes remain uncertain.

Ethereum London Hard Fork
Ethereum Improvement Proposal