{"id":11352,"date":"2022-03-21T11:04:06","date_gmt":"2022-03-21T11:04:06","guid":{"rendered":"https:\/\/egrowonline.com\/?p=11352"},"modified":"2022-03-21T11:04:06","modified_gmt":"2022-03-21T11:04:06","slug":"nearly-6-billion-in-eth-burned-as-ethereum-2-0-edges-closer","status":"publish","type":"post","link":"http:\/\/egrowonline.com\/?p=11352","title":{"rendered":"Nearly $6 Billion in ETH Burned as Ethereum 2.0 Edges Closer"},"content":{"rendered":"


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Ethereum<\/a><\/span>\u2019s burn mechanism is hotter than ever, as crypto\u2019s second-largest network has officially destroyed over 2 million ETH since the mechanism was introduced <\/span>last August<\/span><\/a>.\u00a0<\/span><\/p>\n

According to <\/span>Watch the Burn<\/span><\/a>, a dashboard monitoring the burn mechanism, the network has destroyed a total of 2,000,996 Ethereum since its inception. In dollar terms, that\u2019s more than $5.82 billion removed from circulation forever.\u00a0<\/span><\/p>\n

Implemented in the <\/span>London hard fork<\/span><\/a>, EIP-1559, the technical name for the burn mechanism, was just one of several updates made to the network.\u00a0<\/span><\/p>\n

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This specific \u201cEthereum Improvement Proposal\u201d restructured the network\u2019s fee structure.\u00a0<\/span><\/p>\n

Instead of all the fees paid to execute various operations on Ethereum going to miners, EIP-1559 essentially split these fees into a base fee and tips (the latter of which would go to miners). <\/span><\/p>\n

It is the base fee that is burned, which is another way of saying that that cryptocurrency is destroyed and removed from circulation.<\/span><\/p>\n

\"A\"A<\/span>
Fee structure before and after the introduction of EIP-1559. Source: ConsenSys<\/a>.<\/figcaption><\/figure>\n

This burn mechanism has also fueled the \u201c<\/span>ultra-sound money<\/span><\/a>\u201d meme.\u00a0<\/span><\/p>\n

The meme follows that when there is a spike in activity on Ethereum, it is possible that the destruction of the circulating supply could outpace the amount issued via block rewards. <\/span><\/p>\n

This creates a deflationary effect in which there are fewer and fewer Ethereum on the market to buy.\u00a0<\/span><\/p>\n

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During a fireside chat<\/a> during this year\u2019s Camp Ethereal, Joe Lubin, Ethereum co-founder and CEO of ConsenSys\u00a0 (which funds an editorially independent Decrypt<\/i>) again <\/span>reminded<\/span><\/a> that yet another upgrade will bring this particular meme into even greater focus.<\/span><\/p>\n

Burned Ethereum and the \u2018Consensus Layer\u2019<\/span><\/h2>\n

Alongside the London Hard Fork, Ethereum is also inching towards its most comprehensive upgrade yet.\u00a0<\/span><\/p>\n

Recently rebranded<\/a> to \u201cConsensus Layer,\u201d Ethereum 2.0<\/a><\/span> would improve the network\u2019s transaction speed, lower costs, and \u201cwill lay to rest Ethereum\u2019s carbon or energy footprint problem,\u201d according to Lubin.\u00a0<\/span><\/p>\n

The upgrade will shift Ethereum away from a proof-of-work<\/span><\/a> (PoW) consensus mechanism, something that Bitcoin<\/a><\/span> also uses to validate transactions, to a different model called proof-of-stake<\/span><\/a> (PoS). The latter mechanism is more environmentally-friendly as it demands less computing power to achieve comparable levels of security.\u00a0<\/span><\/p>\n

That\u2019s not all either. <\/span><\/p>\n

\u201cAnother exciting thing about moving to proof-of-stake is that proof-of-work requires a lot of issuance of ether [the term used to describe Ethereum the cryptocurrency rather than the network] in order to incentivize these people with heavy infrastructure, to lend their resources and validate transactions on the network,\u201d said Lubin. \u201cSo if you have very light infrastructure, then you can issue much less ether per block that’s constructed.”<\/span><\/p>\n

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Less issuance means that there will be fewer Ethereum distributed onto the market.\u00a0<\/span><\/p>\n

This, plus the burn mechanism at work now, means that Ethereum will \u201cbe burning more ether every single day than is issued, because much less ether will be issued to secure the network,\u201d said Lubin. \u201cAnd so ultra-sound money is about to come into existence.\u201d\u00a0<\/span><\/p>\n

All of these changes are slated for launch \u201cby Q2 or possibly slipping into Q3\u201d according to the Ethereum co-founder.<\/span><\/p>\n

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Ethereum\u2019s burn mechanism is hotter than ever, as crypto\u2019s second-largest network has officially destroyed over 2 million ETH since the mechanism was introduced last August.\u00a0 According to Watch the Burn, a dashboard monitoring the burn mechanism, the network has destroyed a total of 2,000,996 Ethereum since its inception. In dollar terms, that\u2019s more than $5.82 […]<\/p>\n","protected":false},"author":1,"featured_media":11353,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[41],"tags":[1065,784,153,1852,181,158],"class_list":["post-11352","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ethereum","tag-billion","tag-burned","tag-closer","tag-edges","tag-eth","tag-ethereum"],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"http:\/\/egrowonline.com\/wp-content\/uploads\/2022\/03\/shutterstock_694333537-gID_1.jpeg","_links":{"self":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts\/11352","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11352"}],"version-history":[{"count":1,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts\/11352\/revisions"}],"predecessor-version":[{"id":11354,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts\/11352\/revisions\/11354"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/media\/11353"}],"wp:attachment":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11352"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11352"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11352"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}