Ethereum (ETH), the world’s largest platform for developing decentralized applications (dApps), is scheduled for a hard fork upgrade (or backwards incompatible update) in less than 12 hours from now.
At the time Constantinople and St. Petersburg (two near-simultaneous hard fork upgrades for Ethereum) will be activated, Ethereum’s full-node operators or transaction validators will be required to update their client software to the latest version. The set of Ethereum network upgrades associated with Constantinople and St. Petersburg, which include important codebase modifications, are expected to be initiated at block number 7,280,000.
During the upcoming Ethereum network upgrade process, the code associated with St. Petersburg is expected to effectively disable select parts of the Constantinople codebase. Initially scheduled to go live in mid-January 2019, the Constantinople update was rolled back after a critical vulnerability was discovered.
Last month, cybersecurity firm ChainSecurity found a major software bug in the Constantinople codebase that referenced certain smart contracts. The vulnerability was detected just a few hours before the hard fork upgrade was scheduled to go live.
Ethereum Improvement Proposals (EIPS) To Be Activated
According to independent blockchain developer Lane Rettig, the set of changes specified by four out of five of the ethereum improvement proposals (EIPs) will not be noticeable to the end-user. As covered, the following EIPs will be activated at the time of the hard fork upgrades:
- EIP 145 – more cost-effective and overall efficient approach to processing information (by adding bitwise shifting operators to the Ethereum Virtual Machine (EVM);
- EIP 1014: better approach to accommodating network scaling solutions such as off-chain transactions;
- EIP 1052 – an improvement on how contracts are processed;
- EIP1234 – 12-month delay of difficulty bomb; reduce mining rewards from 3 ETH to 2 ETH per block;
- EIP 1283 – a better way to monetize data storage changes (made by smart contract programmers)
At press time, there are 1,763 blocks remaining until block number 7,280,000 is mined on Ethereum. As explained, it will be precisely at block height 7,280,000 that Constantinople and St. Petersburg will be activated. Notably, the code associated with four out of five of the EIPs listed above will be added to Ethereum’s existing codebase.
EIP 1283, which contained the discovered vulnerability, will not be activated with Constantinople during this hard fork update. After activation, Constantinople and St. Petersburg will effectively reduce block rewards for miners from 3 to 2 ETH. When the Byzantium hard fork was initiated a few years back, mining rewards had been reduced from 5 ETH to 3 ETH.
The gradual reduction in compensation paid to Ethereum miners is part of an overall strategy which involves the “Ice Age.” When the Ice Age is reached, it should disincentivize the network’s miners from mining on the Ethereum blockchain as there will be almost no rewards for generating new blocks. At this stage, Ethereum’s consensus protocol might switch from proof-of-work (PoW) to proof-of-stake (PoS) – assuming all the other related technical issues are appropriately addressed.
Gradually Reducing Miner Rewards, Transitioning To Proof-of-Stake
In an email sent to Coindesk, Rettig wrote:
The reduction in ETH block rewards … will clearly have a big impact on miners.
According to Eric Conner, the founder of Ethereum-related information portal, ETHHub, the upcoming codebase modifications are intended to be a “temporary fix.” The next upgrade planned for Ethereum, referred to as Serenity, is expected to introduce new network management protocols.
In September, Conner had said:
[ETH supply] in late 2018 and 2019 is over what was initially assumed by the community. It’s at 7.5 percent inflation now … [We’re] reducing it to 2 ETH per block – roughly 4.5 percent inflation – as a stop gap until Casper is done.