On Wednesday evening the Ethereum network will produce unit number 7 080 000, albeit on a test network but to join the game the hard fork Ethereum Constantinople.
Hardwork, which, as suggested by Vitalik Buterin should be called “network upgrades” will represent a network of five new proposals for improvement (EIP) and will be an important milestone in the ongoing development of Ethereum.
In anticipation of the event we took the opportunity to review the changes that will be implemented, including the crucial question of remuneration to the miners and inflation in the total supply ETH.
IMO the Ethereum community should consider adopting @zcashco’s terminology of calling things like Constantinople “network upgrades” and reserve “fork” splits that leave for 2+ viable chains. Too many people asking me lately where they can dump their non-Constantinople coins…
— Vitalik Non-giver of Ether (@VitalikButerin) 10 January 2019
Why hardwork?
The term “fork” is represented as the image of the nature of the blockchain, forking in two, that is correct, but can sometimes be useless.
Branching is mainly concerned with rules, and the key fact is that the blocks created in accordance with the new rule set will not be compatible with the units established under the old rules. Because of the five EIP, is included in Constantinople, upgraded nodes will begin to create blocks that are not recognized by nodes running older versions of the software, and Vice versa.
In all probability, almost all nodes Ethereum will eventually move to an updated version (though perhaps not in time). In fact, the second viable blockchain will not.
What changes will be made?
Four of the five EIP, is included in Constantinople, contain technical optimization, which, although important for further development of the network, will not have much impact on the end user.
Among these changes EIP 145, which allows a bitwise shift to the virtual machine Ethereum, making a certain class of arithmetic operations much more efficient for processing; EIP 1014, which allows developers to interact with the Ethereum addresses that have not yet been created; EIP 1052, which introduces the operation code (machine learning) to extract the hash code of the smart contract; and EIP 1283, which changes the operation of the counter of gas (the price that users pay for transactions or smart contracts) in some situations.
And the fifth change, the EIP 1234, which is the most controversial. This proposal reduces compensation for a unit with 3 ETH to ETH 2: 33 percent reduction in payments to miners, called “The Thirdening“.
In fact, the miners are the unintended victim of a reduction in the reward for the block.
Thirdening goal is to adjust the level of inflation, because the rewards are the only way to create a new ETH. According to preliminary calculations of the developers of Ethereum ConsenSys, the final effect will be that the daily rate of increase of the supply of ETH will be reduced from 20 to 13 300 400 or ETH 7.4 million per year to 4.9 million ETH a year.
It is believed that the share of ETH already exists, and this means a reduction of annual inflation from 7.7 to 4.8 percent.
In fact, the miners are the unintended victim of a reduction in the reward for the block. It is not a measure taken specifically to deprive them of income, but another way to slow down the rate of production of ETH no. No doubt that the time for such changes is not perfect: the broadcast is currently trading at around $ 130, which amounts to only 10 percent of its market value on the same date last year.
For miners, the motivation usually is to maximize profit at any price for the equipment and electricity they can get, reducing the reward for a block is equal to the decrease in profit. It remains to be seen if it will work for miners from Ethereum and will switch their resources to another block chain. After the update will take effect, much attention will be paid to Hasrat network, because it indicates how many miners are working.
Is it good?
Short answer: hard to say.
Longer answer: probably a good thing. Depending on which indicators you think are progressive and what sources of information do you consider accurate.
For just a few days, only 15.6% of clients Ethereum has updated software that is compatible with a fork, according to the tracker forknoatch ethernodes.org. It looks alarmingly low number, and will certainly be a cause for concern if would be the final figure. However, there are other indicators.
Considering that only devices in the network, the upgrade level is currently at 44%, some believe that this is an acceptable level if the updated device will focus on miners and exchanges, which play a crucial role in supporting the Ethereum.
[6] Out of these nodes, 235 (73%) of Parity Ethereum nodes and 798 (39%) of Geth nodes are already upgraded to Constantinople. So, in total, if we assume this sample is statistically representative for the Ethereum network, we can expect an overall upgrade rate of ~44%.
— Afri 🌩 app Jan 16 (@5chdn) 12 Jan 2019
What happened last time?
In October 2017 in Ethereum was realized the hard fork Byzantium, which, among other things, reduced the award for the block from 5 to 3 ETH. At that time the difficulty has decreased, meaning that the faster miners mined blocks and often received a reward. In the upcoming hard fork lowering the difficulty will not occur, so many miners may decide to leave the game.
Drop the complexity of the network after the hard fork “Byzantium”
In the long term, the Ethereum developers are unlikely to be concerned about it, since Constantinople is on the way to the system of mining, with evidence of the interest which would have completely eliminated mining proof of work. But in the short term, in connection with the recent events of attack of 51% on Ethereum Classic significant reduction in capacity of the network will cause some concern about security.
Overall another hardwork Ethereum is still quite controversial, and discussions on social networks are not going away. This event may like to spur the price of Ethereum, and dragged for the whole cryptocurrency market and bring down it, in the event of any mishap.
