Ethereum's London hard fork upgrade has been burning ether at a rate of around $8,900 a minute, data shows

Ether is burning at a rate of around 3.17 coins a minute since the new upgrade rolled out across the network, data showed.
Ethereum's so-called "London hard fork" launched Thursday and expands the network's capacity.
Ether surged 8% in price after the upgrade came into effect the previous day, but has since pared some gains.
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This week's key upgrade to the ethereum network will increase demand for use of the blockchain, but it's also triggered the much-anticipated burning of ether coins as part of the process, which should add to the bullish outlook for the token, according to data and market watchers on Friday.

In the roughly 24 hours since the so-called "London hard fork" upgrade rolled out on Thursday, around 3.17 ether is burning every minute - worth roughly $8,900 based on the average price in that time - according to data from etherchain.

The hard fork, one of a number of ethereum improvement proposals (EIP), was number EIP-1559 and it was this protocol that was designed to give the network the capacity to process more transactions.

"With more scalability, ethereum can support larger, more complex computational use cases like social networks, market places, and various creative tribes," Lex Sokolin, global fintech co-head and head economist at blockchain company ConsenSys, told Insider.

Better scalability essentially means faster transaction speeds and greater efficiency.

With the network upgrade in effect, users will no longer use the previous auction system for ether coins and instead will pay a base fee. That fee will be set automatically by the network depending on how busy it is, instead of from users submitting bids. They will also be able to pay a miner a "tip" to have their transaction processed sooner.

Prior to the upgrade, no ether coins were being burned, Sokolin said.

"Ether's upgrade should yield lower fee volatility and improved market efficiency," Edward Moya, senior market analyst from Oanda, an online brokerage, told Insider.

Ether, the second-largest cryptocurrency by market value after bitcoin, was last around $2,858, up around 1.1% on the Kraken exchange, having hit a high over the last 24 hours of $2,880.

Read the original article on Business Insider