Ethereum has become one of the most trusted cryptocurrencies in the world since its inception in 2015. However, this success has not come from sitting idle. Ethereum’s continued progress in its security protocols and a solid foundation in its smart contract functionality has made it a leader in volume traded on the market. It is this focus on evolution and increased performance that brings us to the next big upgrade: Constantinople. The upgrade is due to launch in the coming days at block #7,280,000 and will be supported by KuCoin.
What is Constantinople?
Constantinople is the latest system-wide upgrade for the Ethereum platform and the next step on the roadmap towards Ethereum 2.0, when the consensus protocol will shift from proof-of-work to proof-of-stake. These large scale code upgrades are often referred to as “hard forks” since they create a permanent break from the existing Ethereum code. In its simplest terms, a hard fork takes place when the underlying code of a cryptocurrency is permanently altered creating two different coins: the resulting coin is no longer compatible with the original coin.
Hard Forks: Risks and Implications
There is always an amount of trepidation when implementing a hard fork, and rightfully so. In order for a hard fork to be completed and function as intended, it must be installed unilaterally across all nodes within a network. Once the upgrade is put into place on all nodes the previous code will be abandoned and the new currency will simply take its place.
This is where the risk lies: if a large enough pool of nodes does not apply the upgrade it can lead to a split in the network. This can happen for a number of reasons, the most notable case being the Ethereum/Ethereum Classic split, which arose from a dispute about the ethics and purpose of the blockchain itself.
In the case of Ethereum and Ethereum Classic, this disagreement lead to a large number of users refusing to install the upgrade. They continued to mine the old blocks on the original code leading to two parallel, independent currencies. As you can imagine this is a less than optimal situation.
Constantinople is part of a three-part upgrade named Metropolis and introduces five new improvements to the Ethereum network known as Ethereum Improvement Proposals (EIPs). Thankfully, for users and developers alike, the Constantinople upgrade is far less controversial than the hard fork that lead to Ethereum Classic.
Most of the upgrades involve improvements in network efficiency and fee structures as well as preparing the way for Ethereum’s eventual scaling roadmap. Two of these upgrades, EIP 145 and EIP 1052, will restructure some operations within the code which will improve ease of use when developing smart contracts. Another interesting upgrade is EIP 1283, which addresses the current “gas crises” affecting users transaction costs.
Debate Amongst Miners
While most of the upgrades will do little to affect the day to day Ethereum experience there are two that have raised concerns with users and miners. The first is EIP 1014, also known as Skinny CREATE2.
This upgrade is supposed to set the stage for new and different scaling solutions as explained by Alexey Akhunov of Turbo Geth (a project aimed at optimizing Ethereum data storage): “CREATE2 also has greater implications for the nature of smart contracts on the network. Another exciting (and potentially dangerous) thing that CREATE2 enables [is] recreating the contracts at the same address after they have been destroyed…This recreation can be done either with the same code, or (with a bit more trickery) with a different code – which basically leads to fully-upgradable contracts.”(O’Leary, R.R. 2019)
The final and most debated code change is EIP 1234. This upgrade has raised concerns since its purpose is to delay the “difficulty bomb” from hitting the network. The “difficulty bomb” is an algorithm that gradually increases the time required to produce new blocks and was created to ease the eventual transition to a proof-of-stake consensus system. Eventually, this will lead to what is known as the “ice age” at which point the difficulty becomes so high that transactions cannot be confirmed.
It is not the delay itself, but the developers’ solution that has caused debate amongst miners. Constantinople will reduce the reward for miners from 3 ETH per block to 2 ETH. Some analysts feel that the current issuance model is inflated and argue for a reduction to 1 ETH per block mined, while others fear that too steep a reduction would push miners to start mining other currencies.
While the debate carries on, Constantinople’s developers are not too worried, as the risk of a chain split is quite low. This is due to the fact that the update’s adoption by Ethereum’s top mining pools has been strong.
Constantinople was due to launch on January 16th of this year, however, developers have encountered some problems that have caused them to push the date back. Smart contract audit firm ChainSecurity discovered a security flaw in the code that allowed reentrancy attacks. A side effect of one of the upgrades affecting gas cost provided malicious actors an avenue to steal cryptocurrency by continually requesting funds while inputting false data.
While this delay may have raised eyebrows within the crypto community the decision was not made in haste. After the security risk was found options were discussed. Ethereum stakeholders, security researchers, Dapp developers, node operators and many more were involved in making this decision, and within less than 24 hours the announcement to delay was made. The only reasonable course of action was to push back the launch date in order to deal with the flaw and ensure that the eventual goes off without a hitch.
The Constantinople hard fork may not be one of the most exciting upgrades in Ethereum’s history; however, it is an important one. The improvements included will push the network further along on their roadmap, and one step closer to the goal of a complete proof-of-stake consensus model.
The relative accord surrounding this upgrade indicates that it will be a smooth process with few issues of miner defiance. All projects encounter snags and hiccups along the way, and Constantinople is no different. However, with such a competent and thorough team at the helm, there is little chance that an efficient, secure and optimized upgrade will not make its way onto the network.
KuCoin will be supporting the upgrade, so now is a great time to join.
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