Ethereum will execute a hard fork this week named “Constantinople.” It is the first major Ethereum update of 2019.
The hard fork will take place at block number 7,080,000, expected on Wednesday 16th January.
So, what is Ethereum Constantinople? What upgrades will it bring? And do you need to do anything with your ethereum funds?
What is Ethereum Constantinople?
In simple terms, the Constantinople lays the technical groundwork for huge scaling plans in the future.
Ethereum has a long roadmap, stretching into 2025, that aims to address congestion problems on the blockchain (the network almost ground to a halt at the end of 2017 when users flooded the system).
The Constantinople upgrade is the first step towards larger scaling ambitions. One independent developer referred to it as a “maintenance and optimization upgrade.” In other words, end-users shouldn’t notice too much difference.
Background reading: What is a hard fork in cryptocurrency?
Is it a contentious hard fork?
Hard forks are considered “contentious” when the community disagrees on the proposals. When that happens, there’s a risk that two competing chains emerge simultaneously.
We saw this happen with the Bitcoin Cash hard fork in November. Ethereum had its own contentious hard fork in 2016 when the community disagreed on how to deal with a hack. This hard fork spawned Ethereum Classic.
Constantinople, however, is not expected to be a contentious hard fork.
There is relatively strong support from miners across the board. The vast majority are expected to upgrade their nodes, and we won’t see two competing chains.
What upgrades will it bring?
The upgrade will implement five ethereum improvement proposals (EIPs). They are as follows:
EIP 145 – Will result in a 91.4% saving in Ethereum gas costs through more efficient information processing methods. It relates to a process known as Bitwise shifting and requires the introduction of a native operation on the Ethereum Virtual Machine (EVM).
EIP 1052 – Makes it cheaper to process large smart contracts that only require a hash. More specifically, this functionality returns the keccak256 hash of a contract’s bytecode. It improves upon the design of the EXTCODECOPY opcode.
EIP 1283 – This proposal aims to help smart contract developers by reducing gas costs related to changes made to data storage.
EIP 1014 – Introduces some off-chain transaction solutions to improve scaling possibilities.
EIP 1234 – Delays the “difficulty bomb” and reduces the mining reward from 3 ETH down to 2 ETH.
What is the difficulty bomb and why is it controversial?
The most controversial change in the proposal is the decision to delay the Ethereum difficulty bomb and reduce the mining reward.
The difficulty bomb is designed to progressively increase mining difficulty on the network. Eventually, it will become so difficult to mine Ethereum blocks, we will enter an “ice age.”
That process is designed to force miners away from Ethereum’s current “proof of work” system to “proof of stake.” Proof of stake is a more efficient algorithm that doesn’t require the vast computing power of miners.
The difficulty bomb will trigger the gradual shift towards the new algorithm by de-incentivizing miners.
The shift will also reduce the mining reward from 3 ETH to 2 ETH. It’s a somewhat controversial move as it will put economic pressure on the mining community. There’s also an argument that it will shift more power into the hands of large mining pools, which can afford to bear the economic costs in the short term.
Although some miners aren’t happy with the proposal, mining pools have indicated their broad support for the upgrade.
If you hold Ethereum…
… You won’t need to do anything with your funds. The hard fork should execute seamlessly and you’re unlikely to notice any difference or disruption.