Today, August 5, the Ethereum network saw the London Harfork on block 12,965,000, which is an important step in the altcoin's transition to the ETH 2.0 protocol.

The essence of Ethereum 2.0 is to move the blockchain from the Proof-of-Work (PoW) consensus algorithm to Proof-of-Stake (PoS). This should solve the problem of scaling the network and make it more user-friendly. However, the London hardforward does not involve a change in the consensus algorithm.

The main protocol update that includes London is EIP-1559, which involves changing the algorithm for rewarding miners and introducing a mechanism to burn a portion of the reward. EIP-1559 will reduce transaction fees by replacing the "first price auction" model with a "base fee" model. Ethereum should become a deflationary asset as a result of coin-burning.

Four other updates to the protocol include delaying the increase in mining complexity, blocking smart contracts whose address begins with '0xEF,' reducing commission compensation and changing the operation that returns the block's base fee.

The wait for the London hardforward has led to Ethereum outpacing bitcoin's growth. In less than 7 days from June 29 to August 5, the ETH/BTC asset rose more than 20% to 0.069 BTC.

On the eve of the hardforward, analysts warned about the well-known investor rule "buy rumor, sell fact," which means that the appearance of positive information about an asset leads to an increase in its price, but after the expected event occurs, a paradoxical dump begins. This is usually due to the fact that traders who have been playing up in anticipation of the event are fixing the profits made.

Amsterdam Stock Exchange trader Michaël van de Poppe believes there will only be a short-term pullback after the hardforward, and then the bullish rally will resume.

As of today, Ethereum had no volatility and was at 0.069 BTC relative to bitcoin, which corresponded to $2615.