Ethereum Hard Fork | What You Need To Know + Delay

An upcoming Ethereum Hard Fork called Constantinople is lined up for this month of January — in this article, we’ll outline what you need to know, what is expected, and the recent developing news about the delay of activation.

[Photo from Altcoin Buzz]

 

Many people think hard forks are a bad thing — considering Ethereum’s hard fork back in 2016 came with plenty of drama — but that is certainly not always the case. This fork, however, doesn’t have any drama attached it and is essentially a software upgrade.

This hard fork, named Constantinople is the second phase of Metropolis, the name for the overall project to upgrade. Ethereum developers are implementing these software upgrades aiming to make the ETH network faster, less expensive and more efficient.

A Fork In The Road — Hard Fork Delayed

After identifying a potential vulnerability in one of the software upgrades, the Ethereum Core Developers and Ethereum Security Community decided to delay the hard fork launch. The statement read:

“Security researchers like ChainSecurity and TrailOfBits ran (and are still running) analysis across the entire blockchain. They did not find any cases of this vulnerability in the wild. However, there is still a non-zero risk that some contracts could be affected.” 

Subsequently, cryptocurrency exchanges, miners, and other Ethereum node operators must either upgrade to emergency versions of their ETH software clients or downgrade to the previous pre-fork release.

Failing to upgrade a node will cause a disconnection from the main ETH network since the new Constantinople software is not compatible with previous versions.

When New Fork Date?

No new fork date has yet been announced since the abrupt delay, but the Ethereum community seems to remain in good spirits about the impending activation of Constantinople, which will implement a number of upgrades into the cryptocurrency’s protocol.

What Is Hard Fork, Anyway?

A hard fork (or sometimes hardfork), as it relates to blockchain technology, is a radical change to the protocol that makes previously invalid blocks/transactions valid (or vice-versa). This requires all nodes or users to upgrade to the latest version of the protocol software. Put differently, a hard fork is a permanent divergence from the previous version of the blockchain, and nodes running previous versions will no longer be accepted by the newest version. This essentially creates a fork in the blockchain: one path follows the new, upgraded blockchain, and the other path continues along the old path. Generally, after a short period of time, those on the old chain will realize that their version of the blockchain is outdated or irrelevant and quickly upgrade to the latest version. [1]

Hard Forks vs. Soft Forks

Hard forks and soft forks are essentially the same things in that when a cryptocurrency’s existing code is changed, an old version remains while a new version is created. However, with a soft fork, only one blockchain will remain valid as users adopt the update. Both forks create a split, but a hard fork creates two blockchains, and a soft fork is meant to result in one. [1]

Explaining The Ethereum Constantinople Hard Fork

This is the most significant ETH hard fork happening between Januar 14th to 18th, 2019, and is expected to be built on 7080000 blocks, improving efficiency and performance. This is undertaken as a step to transit from Proof of Work (PoW) protocol to Proof of Stake (PoS) protocol (Casper update). With the upside being the hard fork will make the ETH network faster and less costly to operate, the controversy may loom over the benefits as it would strip the ETH block reward from 3 ETH to 2 ETH as well.

In addition, it will delay the increase in mining difficulty which was placed there for the Proof of Stake (PoS) upgrade.

What To Expect and the Possible Effects of these ETH Hard Forks

As the block rewards will be lowered to 2 ETH, investors must welcome a lower inflation rate of Ether supply. Miners have been struggling due to ETH price decline and cutting the block reward by one-third during this time could be seen as ungracious. Investors are in dismay of what to expect from the upcoming ETH hard forks, especially after the last BCH hard fork happened in November 2018.

We can also expect some kind of short-term volatility once the hard forks are announced. The transition into PoS is a risk, but Vitalik Buterin doesn’t mind taking that risk as he cares little about the short-term influence on its price, but more about succeeding as an investment rather than a technology. As investors are aware of the transition’s upsides, expect more investors to be attracted. [2]

How It Will Impact The Crypto Ecosystem

The crypto industry should brace themselves for the biggest and first forks of 2019. The impact on the ETH price will be substantial, as it is working to transition ETH into an updated version, essentially helping its growth. It’s possible that the price of Ethereum going upwards may cause other cryptocurrencies to suffer a downfall for a short bout during the hard forks. We witnessed similar circumstances proceeding the Bitcoin Cash hard fork, where other cryptos saw a significant decline for a period of time.

Of course, it will be difficult to predict the long-term impact of a hard fork, but it is surely evident that Ethereum is in a very crucial phase now as it transitions through a momentous stage.


Resources:

[1] https://www.investopedia.com/terms/h/hard-fork.asp

[2] https://coinswitch.co/news/ethereum-hard-fork-jan-19-know-everything-about-3-upcoming-eth-hard-forks