The ether cryptocurrency is run by the ethereum network, which is the second largest after bitcoin. Dado Ruvic/ReutersThursday is the date for a major upgrade to the ethereum network, codenamed EIP-1559.Some investors are excited about the change, which will destroy or "burn" ether coin.Insider reveals four important facts about the upgrade.Subscribe to our daily newsletter 10 Things Before The Opening Bell.On Thursday, the ethereum network will receive a much-anticipated upgrade. This upgrade will alter the transaction fees and begin to destroy coins. The upgrade was originally scheduled for August 4, but it was slightly delayed.Technically, the change is known as Ethereum Improvement Protocol 1559 or EIP-1559 and will be included within a network upgrade known as the "London hardfork."These are the four most important things to remember.EIP-1559 is designed to make transaction fees less predictableThe move to ethereum was about making transaction fees less predictable and making the network more user-friendly.Due to the use of an auction system, fees are highly volatile at present. To have transactions processed by miners, users bid against one another.Transaction fees can rise when the network is busy. Developers see the problem in that fees are highly volatile and unpredictable due to the blind auction system.Users will now pay a "base charge" after EIP-1559. This fee will be determined algorithmically by the network based on how busy it is. Users will be able pay a "tip", to expedite their transactions, to help them get to the miner.It is intended that users will know the base fee of the network as they enter transactions. Users won't be confused and it won't change from one minute to another. Users can always wait for it to drop if it is too high.It can destroy coins and increase ether.EIP-1559 is a popular cryptocurrency that will "burn" or destroy ether.The base fee is not paid to miners, as they might artificially increase the cost of the network. Instead, it's destroyed.Investors believe that the fact that ether supply will be limited through burning could lead to explosive price growth.Developers say that the price impact is not certain. It also depends upon things such as transaction volumes which affect how high gas fees are and how much ether is lost."Until it is deployed, we don’t know what the effect will have in terms of ether burn," Ben Edgington (ethereum developer at ConsenSys), said.Transaction fees are not necessarily cheaperTransaction fees for the ethereum network could fall because users will likely pay less under the higher-bidder-wins system.EIP-1559 is not designed to lower transaction fees, but to make them more predictable. The base fee will fluctuate, increasing when there is more traffic and decreasing when there is less.The ethereum network is undergoing major changesEIP-1559 may seem small compared to ethereum2.0 - a complete overhaul of the entire network's infrastructure that developers hope will be completed by early 2022.Ethereum 2.0 will see Ethereum's network move from a proof-of-work system to one that is "proof of stake". To verify transactions, miners must use a lot of computing power under PoW. Users will submit ether to earn coins and verify transactions under PoW.Developers are also working to scale up the Ethereum network by creating more side networks and linking them together. Insiders at Ethereum hope that this will decrease congestion and transaction costs.
