Understanding Ethereum London Hard Fork: Why It Mattered for Gas Fees and the Merge

The Big Picture: What Ethereum London Actually Did

When Ethereum launched its London hard fork in August 2021, it wasn’t just a routine update—it fundamentally changed how the network handled transactions and set the stage for Ethereum’s eventual transition to Proof of Stake. The upgrade introduced critical improvements through multiple Ethereum Improvement Proposals (EIPs), with two standing out as game-changers: a revolutionary fee mechanism and a strategic delay on network difficulty.

EIP-1559: Fixing the Gas Fee Nightmare

Before the London hard fork, Ethereum’s transaction fee system was chaotic. Users had to manually bid for block space like an auction, often overpaying significantly or watching their transactions get stuck in the mempool. During periods of network congestion, this became unbearable—you’d need to pay $20+ in gas just to move small amounts of value, making the network unusable for everyday users.

Co-founder Vitalik Buterin and his team designed EIP-1559 to solve this exact problem. Here’s how the new system works:

Base Fee Model: Each block now has a base fee that automatically adjusts based on network demand. If blocks are more than 50% full, the base fee increases; if they’re less than 50% full, it decreases. This creates a self-balancing mechanism that keeps the network in optimal condition.

Fee Burning Mechanism: Unlike the old system where all fees went to miners, EIP-1559 burns the base fee entirely—permanently removing it from ETH’s total supply. This creates deflationary pressure on the cryptocurrency and continues to reduce Ethereum’s circulating supply to this day.

Priority Tips: Users can still add an optional priority fee (tip) to get their transactions processed faster, but the guesswork is gone. Gas estimation became far more predictable, making wallet software and decentralized applications much more user-friendly.

Why This Mattered for Regular Users

The practical impact was enormous. After the London hard fork, you no longer needed to obsess over gas prices when making transactions. The base fee handles the heavy lifting automatically. If network conditions change between when you submit a transaction and when it gets included in a block, you can set a fee cap to protect yourself—and if the actual base fee is lower, the network refunds the difference.

For beginners especially, this was transformative. The fee system shifted from a confusing auction where overpaying was the norm to a predictable, transparent model.

EIP-3238: Buying Time for the Proof of Stake Transition

Ethereum had another ticking clock: the difficulty bomb, a mechanism designed to make Proof of Work mining progressively harder over time. The idea was to force the network’s eventual migration to Proof of Stake by making PoW increasingly unviable.

However, in 2021, Ethereum’s transition to PoS wasn’t ready yet. EIP-3238 postponed the difficulty bomb, giving developers and the community breathing room to finalize the Ethereum 2.0 upgrade without rushing. This strategic delay proved crucial—by September 2022, Ethereum successfully completed the Merge and moved entirely to Proof of Stake. The difficulty bomb is now a legacy feature; it no longer serves an active purpose.

What Are EIPs and How Do They Work?

Ethereum Improvement Proposals (EIPs) are technical specifications for new features submitted by developers and community members. Anyone can propose an EIP, but it requires rigorous peer review, community consensus, and extensive documentation before implementation. Each proposal must include a concise technical specification and clear rationale for why the change matters.

The Controversy Around London

The London hard fork sparked genuine debate within the Ethereum community. Miners worried about revenue loss due to base fee burning, while users celebrated lower fee predictability. Some also feared that only large mining operations could remain profitable, risking network centralization.

These concerns ultimately became moot once Ethereum fully transitioned to Proof of Stake, eliminating mining altogether. The focus shifted to the long-term deflationary benefits of EIP-1559, which has since removed millions of ETH from circulation through continuous fee burning.

Legacy and Impact Today

The London hard fork was far more than a technical update—it was a crucial stepping stone in Ethereum’s evolution. It demonstrated the network’s ability to implement major changes smoothly and proved that the community could collectively decide on its future direction. The upgrade made Ethereum more accessible to users, reduced fee volatility, and created the conditions necessary for the successful transition to Proof of Stake.

Today, EIP-1559’s fee-burning mechanism remains active and continues to shape Ethereum’s long-term tokenomics. For users, the legacy is simple: transactions that would have been prohibitively expensive in the pre-London era are now manageable, and gas prediction is far more reliable across wallets and dApps. The London hard fork helped transform Ethereum from a network plagued by fee confusion into one that prioritizes sustainability and user experience.