Ethereum miners plan hash power “show of force” against EIP-1559

Some Ethereum miners are trying to rally support for a show of force showing their opposition to the imminent implementation of EIP-1559..

Against a backdrop of ever-increasing Ethereum fees, Ethereum’s Enhancement Proposal aims to replace the current network bid-based fee market with a fixed price and burning mechanism.

Nevertheless, EIP-1559, scheduled to go live in July, will significantly affect miners’ income. Some analysts estimate that Ethereum miners could lose up to 50% of their profits.

To signal your opposition to the proposal, Some Ether miners are planning a 51-hour show of force for April 1. The miners intend to direct their hash rate to the opposite pool of 1559, Ethermine, for 51 hours on April 1. Apparently some hope to take advantage of more than 51% of the hash rate.

If that was successful, the pool would command enough mining power to make unilateral changes to the network protocol.

In a video broadcast live on March 9, popular YouTuber “Bits Be Trippin ‘” discussed the planned redirection of hash power, describing the proposed move as a benevolent “show of force.”:

“Part of the risk display here is not attacking the network, it is showing that force projection is possible.”

The YouTuber tried to allay concerns that Ethermine might the new hashing power to attack the network, stating that “there is no incentive” for them to do so.

“What it’s showing is that if you have an incentive misalignment, you can take the network into a position where a would-be attacker could put a price point there, pay a lot more for that hashpower that just got kicked out, and now you have a situation where you could have a double spend or a block reorg “, He said.

On March 5, Cointelegraph reported that Ethereum core developers announced that EIP-1559 would be rolled out in July. Many Ethereum advocates from outside the mining sector celebrated the news.

Apart from keeping a cap on rates, part of the appeal of the proposal is that it could end up lowering the supply of Ether. Appearing on Tim Ferriss’s podcast yesterday, Ethereum co-founder and EIP-1559 co-author Vitalik Buterin emphasizes that the proposal’s burning mechanism could result in more Ether being destroyed than is created, creating a bullish dynamic for Ethereum:

“If the demand to use Ethereum is high enough, there will be more ETH destroyed than created. So the joke I would make sometimes is that if Bitcoin knows that fixed supply is solid money, then if it has a decreasing supply, does that make us ultrasonic money? “

Previous analyzes have estimated that more than 1 million Ether would have been burned between October 2019 and October 2020 if the EIP-1559 had been live at that time, which is equivalent to approximately 1% of the circulating supply of the crypto asset.

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