Bittime - The Ethereum network will undergo an update (upgrade) called Deneb-Cancun, or Dencun on Wednesday March 13, 2024. This update aims to improve user experience and lower transaction fees for some users on Ethereum's Layer 2 blockchain. Ether (ETH), the native currency of the Ethereum blockchain, traded around $4,000 on Tuesday.
What Is Ethereum's Dencun Update?
The Dencun update, which is scheduled to go live on Wednesday, focuses on improving scalability, efficiency, and security through the implementation of various Ethereum Improvement Proposals (EIP).
According to the Ethereum Foundation, the most important change is EIP-4844 for proto-danksharding. This technology aims to optimize gas fees for Layer 2 (L2) network data and improve the network's ability to handle larger transaction volumes through that secondary layer.
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Update Impact: Delays and Changes
Some crypto exchanges may experience delays in processing Ethereum transactions on Wednesday as the update rolls out. Coinbase (COIN) expects outages resulting from the update to last for at least an hour at or around 6:45 a.m. Pacific Time.
While Kraken estimates a delay of approximately 15 minutes for maintenance around 8:00 UTC and advises users "not to place orders or cancel orders during this period."
Blobs, Rollups, Gas: What's Changed?
Layer 2 networks, like rollup, are secondary blockchains built on top of the main Ethereum network. To increase transaction volume, rollup compresses transactions by grouping them. Initial verification for the transaction occurs outside the network, but the transaction is completed on the main Ethereum blockchain.
However, even with compression, nodes processing transactions retain Layer 2 data indefinitely, increasing their hardware requirements. This is ultimately passed on to users through higher transaction or gas fees. More than 90% of the fees paid by users on rollup are due to this data storage.
The Dencun update will change that. Layer 2 network-related information can now be added to the main Ethereum blockchain via temporary “blobs” that are stored more efficiently, rather than as permanent data. Currently, blob data will be available for 18 days. This aims to lower transaction costs.
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Are Fees Dropping for All Users?
It is worth noting that Ethereum users on the main blockchain or Layer 1 users will not benefit much from the low fees found on the Layer 2 network after the update.
Is Ethereum Becoming More Competitive?
Currently, Ethereum's performance is hampered by its slow transaction speeds, low throughput, and high fees for users. With average transaction fees of $2.3 as of February 22, Ethereum is much more expensive compared to alternatives like Solana. This could potentially make users switch to other blockchains.
Dencun's upgrade "could help Ethereum compete on scalability with faster blockchains," the Grayscale report said .
Additionally, Fidelity argues that recent changes to the Ethereum network could help the transition from a general-purpose blockchain to a global database for Layer 2 networks. "The best way to measure the success of the Dencun update is to track the number of Layer 2 users through metrics such as active addresses," it said Fidelity.
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Ethereum Performance Today
Source: Bittime
ExploreIn the last 24 hours, the price of Ethereum (ETH) has experienced fluctuations. Based on the latest data, Ethereum is trading at IDR 63.3 million with a trading volume of IDR 408,290,450,701,387 . This price shows an increase of 0.01% from the previous day. These price movements reflect changing market dynamics and highlight the importance of constant monitoring for investors and users of the Ethereum network.
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To be able to buy crypto assets on Bittime, make sure you have registered and completed identity verification. Apart from that, also make sure that you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application.
Learn Complete Guide How to Buy Crypto on Bittime.
Monitor price chart movements of Bitcoin (BTC), Ethereum (ETH), Solana (SOL) and other cryptos to find out today's crypto market trends in real-time on Bittime.
Also read:
Ethereum Dencun Launches on Holesky Testnet
DenCun Ethereum Upgrade Guide, Follow the Steps!
Ethereum Surpasses $3,300, Is It Due to Dencun's Influence?
Dencun: An Ethereum Lifeboat to Compete in the Sea of Blockchain
DISCLAIMER: This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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