Ethereum’s vision to build a global platform for decentralized applications seems to be a bit far fetched as of now. However, Ethereum’s Constantinople hard fork may be best suited to help it achieve its primary mission.
Ever since the beginning of Ethereum in 2015, it has utilized a proof-of-work (PoW) consensus algorithm. Proof of work was invented way back in the ’90s to prevent spam and services attacks. Cryptocurrency’s such as Ethereum use proof-of-work to ensure their open source has some sort of governance to weaken bad actors.
It wasn’t until cryptocurrency users grew to the millions when proof-of-work was not suitable as it became too slow. Thus a proof-of-stake (PoS) algorithm, was created.
With PoS being favorable, the hard fork for Ethereum known as Constantinople will be known as Ethereum 2.0. It will take place on block 7,080,000 and is to occur tomorrow, January 16th.
What are the fundamental changes in Ethereum 2.0?
- EIP 145: Bitwise Shifting Instructions for Efficiency & Speed – Shifts in smart contracts will be 10x cheaper.
- EIP 1052: Smart Contract Verification for Speed & Energy – Smart contract can verify one another by pulling just the hash of the other smart contract.
- EIP 1014: CREATE2 for Scalability. Vitalik Buterin developed it.
- EIP 1283: SSTORE – Reduction of the gas cost by enabling multiple updates to occur within one transaction.
- EIP 1234: Block Rewards & Difficulty Bomb Delay – The block reward reduction will reduce the reward from 3 ETH to 2ETH. The difficulty bomb delay if activated would increase the energy required to mine a block until no new blocks can be mined.
Since second layer solutions will be implemented, exchanges like Binance and Coinbase will have to update their nodes. Even cryptocurrency services such as MetaMask and Etherscan will need to upgrade their nodes. However, users may not notice the upgrade as much.
Ethereum Constantinople Infographic by Consensys
Ethereum may be able to gain back to what it was in the period of 2017 with Constantinople. Improvements such as lower cost, higher speed, and better efficiency may bring Ethereum back to its potential.
At the time of writing, Ethereum seems to be capitalizing before the upgrade. Ethereum is back in the third rank, with a market capitalization of $13,322,438,984 and a price of $127.63. However, with the update releasing tomorrow, expect it to jump back to the second position.
Image Source – Flickr
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