Ethereum’s Constantinople Hard Fork Delayed Due to Discovery of Critical Bug, ETH Price Drops Over 7%

Siamak Masnavi

On Tuesday (January 15th), Zurich-based blockchain security firm ChainSecurity announced that it had discovered a critical bug in Ethereum's code changes for the Constantinople upgrade that could leave some smart contracts vulnerable to attacks that could lead to loss of user funds. This means that the Constantinople hard fork, which was expected to be activated around 20:00 PT on January 16th (i.e. 04:00 UTC on January 17th) at block number 7,080,000, has had to be delayed.

ChainSecurity offers three types of services:

  • smart contract audits (based on its "proprietary audit platform");
  • a secuity audit platform (a set of "automated tools for developers and auditors" -- this takes a smart contract and its formal specification as inputs and produces a security report as the output; and
  • security monitoring ("ideal for exchanges and response teams") -- this type of monitoring "inspects smart contracts on-chain to ensure compliance and absence of security exploits".

ChainSecurity's Medium blog post, which was published around 16:00 UTC on January 15th, was titled "Constantinople enables new Reentrancy Attack." Here is the summary of the critical vulnerability that ChainSecurity had discovered:

"The upcoming Constantinople Upgrade for the ethereum network introduces cheaper gas cost for certain SSTORE operations. As an unwanted side effect, this enables reentrancy attacks when using address.transfer(...) or address.send(...) in Solidity smart contracts. Previously these functions were considered reentrancy-safe, which they aren’t any longer."

So, basically, ChainSecurity was saying that the implementation of one of the Constantinople's five main changes, Ethereum Improvement Proposal (EIP) 1283 contained a critical bug. This discovery led to Ethereum's core developers, as well as other key stakeholders such as Ethereum creator Vitalik Buterin, speaking via Zoom audio call and agreeing to delay the hard fork while they studied this issue, with a further meeting scheduled for this Friday to decide on a new fork date.

This is how the Ethereum Foundation announced (at 21:45 on January 15th) the news about the postponement of the Constantinople hard fork:

Ethereum Foundation's blog post had this avice for anyone running a node:

"Out of an abundance of caution, key stakeholders around the Ethereum community have determined that the best course of action will be to delay the planned Constantinople fork that would have occurred at block 7,080,000 on January 16, 2019. This will require anyone running a node (node operators, exchanges, miners, wallet services, etc…) to update to a new version of Geth or Parity before block 7,080,000. Block 7,080,000 will occur in approximately 32 hours from the time of this publishing or at approximately January 16, 8:00pm PT / January 16, 11:00pm ET / January 17, 4:00am GMT."

This blog post pointed out that "if you are a person who simply interacts with Ethereum (you do not run a node), you do not need to do anything." This includes smart contract owners (since "the change that would introduce this potential vulnerability will not be enabled").

As for those running an Ethereum node, it advised them to update their "Geth and/or Parity instances when they are released." (These new releases should become available by around 02:00 UTC on January 16th.)

At press time, according to CryptoCompare, ETH is trading at $120.15, down 7.31% in the past 24-hour period.

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Bitcoin Hashrate Reaches All-Time High, As BTC Halving Event Approaches

Bitcoin’s (BTC) hashrate recently reached an all-time high according to data from Blockchain.com, a leading London-based block explorer service.

Bitcoin network’s hashrate, which represents the amount of computing resources being dedicated towards providing security for the cryptocurrency’s blockchain (among other uses), has been climbing steadily in the past few months.

Higher Hashrate Suggests Increased Interest in Mining Bitcoin

Available data from June 19, 2019 shows that Bitcoin’s hashrate currently stands at around 65.19 trillion hashes per second (TH/s). Notably, the BTC blockchain’s hashing power began to increase significantly as the pseudonymous cryptocurrency’s price crossed the $9,000 and then $10,000 mark.

In addition to improving the security of the Bitcoin blockchain, a higher hashrate indicates that the overall interest in mining BTC has surged - presumably due to the recovery made by the bitcoin price and also that of other major cryptoassets.

Hashrate May Be Used to “Hack Humans to Create Gold 2.0”

Commenting on the rising hashrate, Wall Street veteran and Bitcoin bull Max Keiser remarked via Twitter that an increase in hash power results in a considerable price increase for Bitcoin in most cases. Keiser believes that even some of bitcoin’s biggest supporters fail to understand the importance of hashrate.

The experienced financial analyst remarked:

[Hashrate can be thought of as] Satoshi’s ability to hack humans to create Gold 2.0.

Previous BTC Hashrate All-Time High of 60 TH/s Set in September 2018

Bitcoin’s recently recorded hashrate of over 65 TH/s is considerably greater than the previous all-time high of about 60 TH/s - which was achieved in September 2018. After reaching a new high last year, bitcoin’s hashrate had been declining steadily - as the cryptocurrency’s price also continued to plummet.

But after bitcoin’s value reached a low of around $3,150 in December 2018, the leading cryptocurrency’s price and also that of other major cryptoassets began to recover in 2019. Other key metrics used to assess the performance of the Bitcoin network have also shown marked improvement.

Less Than 16% of 21 Million Bitcoins Left to Be Mined

According to BitcoinBlockHalf data, there are only 3,220,350 bitcoins left to be mined as the Bitcoin protocol has algorithmically capped the maximum supply of BTC at 21 million. 

At present, there should be 17,779,650 bitcoins in circulation but analysts have estimated that nearly 4 million BTC has been lost due to account mismanagement - including users forgetting their private passwords to their crypto wallets.

Moreover, the Bitcoin halving is approaching (on track to take place on May 21, 2020), a critical event which reduces the number of bitcoins that can be digitally printed (from mining) by 50%. Several crypto researchers have noted that this is one of the most significant events in bitcoin’s relatively short history as the reduction in the BTC supply has had a notable impact on the crypto’s price.