ETH 2.0 upgrade is a milestone event in the history of Ethereum . This upgrade makes the Ethereum consensus model change from PoW to PoS. Behind this is not only a technical upgrade, but also involves huge interests. Guo Maoqian of the Southern Song Dynasty wrote in "Yuefu Poetry Collection·Chicken Crow": "The peach is on the well, the plum tree is beside the peach, the worm comes to gnaw the peach root, and the plum tree replaces the peach." This is used to describe the fork drama staged by the ETH PoW team, or it is also appropriate. The ETH PoW team is like this worm, PoS ETH is like this "peach tree", and the original ETH PoW chain is like the "plum tree". This "worm" seems to disagree with ETH's conversion to PoS, but actually intends to "suck" the "blood" of the original ETH PoW. So what is the difference between ETH PoW and the original ETH PoW chain? What kind of undercurrent is hidden behind the Ethereum hard fork? Is it the community's will behind the fork or someone wants to make quick money? After the Ethereum fork, what will happen to ETHW in the end?

What is the difference between ETHW and ETC forks? Uncovering the technical nature of ETH PoW forks

There are two types of forks in the blockchain world: 1. Forks caused by network asynchrony; 2. Forks caused by version differences. This article mainly discusses the second type. In the Ethereum world, the most well-known hard fork is ETC. Let's compare the ETHW and ETC forks to see how they differ.

In the early days of Ethereum DAO, funds were stolen by hackers, which eventually led to the separation of ETC and ETH chains. From the perspective of the two versions, ETC did not roll back due to the theft of funds by hackers, while the latter did roll back, and there was no difference in the other versions; in essence, the ETC fork was a community split caused by different concepts. The ETC community firmly believes in the immutable nature of the blockchain, while the ETH community supports the rollback from the perspective of Ethereum's long-term development. Unlike the hard fork of ETC, the fork of ETH PoW seems to be a long-planned one.

First of all, we need to point out a misunderstanding: the forked chain of ETH PoW is not the original PoW chain of ETH. The original PoW chain of ETH should have a difficulty bomb, that is, a PoW chain that "does not upgrade the client", while PoS ETH and ETH PoW are both "upgraded client" chains. The reason why ETH PoW is suspected of being premeditated is that if ETH PoW forks today, it is completely possible not to choose the same height as PoS Merge; however, choosing the same height as PoS ETH is intended to mislead people to regard it as the original chain of ETH PoW. It should be noted that this is completely different from ETC. ETC is actually the original PoW chain of the most original ETH. So who is behind the ETH PoW team? What is the purpose of doing this?

The undercurrent behind the ETH upgrade: the battle for Ethereum’s computing power “legacy”

The upgrade of Ethereum to PoS has been a long-term plan. The amount of Ethereum staked on the beacon chain is already very large. People thought it was a natural thing, but why did so many people suddenly start to oppose it? What is behind this excitement? In fact, this fork is not about competing for developers, because Vitalik is still alive, and the core developers of Ethereum and mainstream applications will basically follow him; this fork is not a community split caused by different concepts, and this is fundamentally different from the ETC fork; in fact, this undercurrent is actually aimed at the large amount of PoW computing power left by Ethereum. You must know that this is a very large "legacy". Let's talk about this in detail.

According to Messari's estimates, the Ethereum merger (The Merge) will force $19 billion worth of POW mining practitioners to find other ways out. Although miners can contribute part of their GPU computing power to Web3 protocols such as Render Network, Livepeer , and Akash , it is difficult for these protocols to take on all the computing power. From the data, the total market value of GPU-mineable tokens other than ETH is only $4.1 billion, accounting for about 2% of ETH's market value, and ETH mining income accounts for 97% of GPU miners' daily income, which means that most existing Ethereum miners cannot find POW mining coins with equivalent economic benefits on the market.

In an article titled "A Detailed Analysis of Potential Public Chains That Can Take Over Ethereum's Massive Computing Power", it is pointed out that the requirements for being able to take over the Ethereum chain are actually very high, and the following four types are not acceptable: 1. Recently released PoW chains; 2. PoW chains with ASIC as the core; 3. Chains that are not distributed purely as PoW tokens; 4. The original PoW chain after the Ethereum fork; and chains that can serve as computing power takeovers have 6 characteristics: 1. PoW public chains that have been verified for a sufficiently long time; 2. PoW public chains that are kept pure without pre-mining; 3. PoW public chains that have preferably not been hyped by the market; 4. PoW public chains that can mine more after joining later; 5. PoW public chains that are not at risk of 51% attacks; 6. PoW public chains that have grander visions and higher-value goals, and that already have a preliminary path to implementation.

If we carefully examine most of the current public chains, there is indeed no suitable public chain that can immediately take over Ethereum's huge computing power. However, the reason why the original PoW chain after the Ethereum fork cannot take over is mainly due to the difficulty bomb. If there is no difficulty bomb, the Ethereum PoW public chain may be more suitable in the short term . This is why the ETH PoW team has to upgrade the version at the same height as ETH PoS. If the upgrade is too early, Ethereum miners will not migrate to it; if they upgrade at the same time, most Ethereum miners may have to stay on the ETH PoW chain temporarily in the short term. Once a large amount of computing power is left on the ETH PoW fork chain, its public chain security can really instantly kill many similar competitors, even ETC cannot compare. So who should inherit Ethereum's "computing power legacy"?

On July 23, regarding ETH's transition from PoW to PoS consensus algorithm, Vitalik Buterin said in an interview that ETC is the natural choice for developers who want to continue using PoW blockchain. From Vitalik's statement, ETC undoubtedly has the legitimacy of ETH PoW computing power, but ETC does not have this strength at present. Once a large amount of computing power flows in, it is very likely to trigger a 51% computing power attack on ETC, which may not necessarily be a good thing.

At present, ETH PoW has its supporters. Sun Yuchen tweeted on August 4 that we (Sun Yuchen and Poloniex trading platform) currently hold more than 1 million ETH. If Ethereum forks successfully this time, we will donate some ETHW to the ETHW (Ethereum PoW fork chain) community and developers to help them build the Ethereum ecosystem. In addition, according to information, Gate.io and Poloniex have already launched ETHW, and some other exchanges are gradually supporting ETHW.

Does the Ethereum fork represent the will of the community, or is it just an outsider trying to make a quick buck?

The issue of Ethereum fork has been very popular recently. Many major projects and institutions have begun to express their opinions, some in support, but more in opposition. So, does the Ethereum fork represent a new chain with community significance, or will it end in farce?

At present, Vitalik Buterin clearly opposed the hard fork of Ethereum in an interview, saying that it was just "a few outsiders who basically own exchanges and want to make a quick buck." In addition, crypto celebrities such as Barry Silbert, CEO of Digital Currency Group, clearly do not support hard forks. The oracle protocol Chainlink has published a statement on its official website that it does not support the fork of the Ethereum network. In addition, many wallet applications have stated that they do not support hard fork tokens. By sorting out the recent comments of the Ethereum community, it can be seen that the main views against the fork are as follows:

1. The difficulty of Ethereum's fork is high and it requires a lot of preparation time. Now there are only a few weeks left, which is too late;

2. ETC has the legitimacy to inherit ETH’s computing power, and ETH miners should turn to ETC to maximize long-term income.

3. The Ethereum hard fork token will inevitably fail after the initial pump because it will not have any users;

4. Ethereum PoW forks are unlikely to gain widespread long-term adoption, and those who advocate for forks are mainly looking to make quick money;

5. Ethereum hard fork will bring huge disaster to the entire Web3 ecosystem

6. To avoid chaos, large projects are likely to shut down smart contracts on the new Ethereum PoW chain;

7. Most of the value on ETH exists in the form of tokens, not just native Ethereum. The new PoW chain is meaningless to existing ETH users.

8. Ethereum saves 99% of energy consumption after the merger, and hard fork is meaningless;

The main supporter and voice of the Ethereum hard fork is undoubtedly the "outsider" Justin Sun. In addition to announcing the listing of Ethereum fork token futures on his Poloniex exchange, Sun is reportedly already signing contracts with some miners to become part of the new chain. In addition, Sun is seeking to incentivize forking Ethereum, saying that he will use forked tokens to build a developer community. In addition to Poloniex, there are indeed exchanges that have expressed their support for Ethereum forks.

Justin Sun responded to Vitalik's remarks by saying that Poloniex supports the ETH hard fork entirely for the public good, not for profit. Poloniex currently does not charge any fees for ETHS/ETHW transactions. If the hard fork is successful, everyone on Ethereum will get ETHW tokens without any pre-mining. Vitalik will get the exact same ETHW ratio as me and everyone else. He only supports that PoW should exist as the consensus mechanism for the merged Ethereum.

On August 9, in an open letter to Bao Erye, ETC Cooperative pointed out in more detail the differences between this Ethereum fork and the ETC fork, as well as the potential impacts that may be brought about. This letter is also like a declaration for ETC to legally inherit the Ethereum computing power legacy. ETC Cooperative said that the Ethereum POW fork will not succeed, and it will even be a very difficult thing. This hard fork is not as simple as the ETH/ETC split, when you just need to continue mining and continue running the same client software. Each of the codes in this testnet fork needs to delete the POS conversion logic, disable the difficulty bomb, and update the chain ID for protection. Mining software may also need to be forked/updated. This will require cooperation with wallet providers to agree to support ETHW; and will require cooperation with exchanges to agree to support ETHW. There are only a few weeks left before the merger. It's too late to do anything now. At the time of the ETH/ETC split, there was no DeFi or stablecoin, so there was no real damage. Finally, the ETC Cooperative called for there to be time to cancel this fork, whose existence would only create more confusion and would inevitably fail after the initial pump as it would have no users.

Will ETH PoW become a farce?

From the above discussion, we can also see that behind this Ethereum hard fork, there is the embarrassing dilemma of miners staying or leaving after the Ethereum upgrade, and there are also a group of behind-the-scenes manipulators who hope to make quick money by obtaining forked tokens, etc. Of course, there may indeed be some community supporters who hope to maintain the Ethereum PoW consensus. Considering the hasty time and difficulty of this hard fork, and the fact that basic protocols such as Chainlink do not support hard forks, whether ETH PoW can successfully fork is still a question.

A merger is technically a hard fork. Different networks can be technically copied, but value cannot be copied. After the ETH PoW chain and the PoS chain are upgraded to the same height, the asset holdings will be copied at first. One copy will exist on the new PoW chain and the other on the PoS chain. The stablecoin issuer will choose which chain to store the real value. On August 9, Circle, the issuer of USDC, issued a statement that it will only support the Ethereum PoS chain after the Ethereum merger is completed. On August 10, Tether, the issuer of USDT, issued a statement that Tether will support PoS Ethereum according to the official schedule. This means that your stablecoins on the new PoW chain have no value. At present, except for ETHW, which may have value, it is expected that other ERC20 tokens will have no value. The forked PoW chain may indeed inherit part of Ethereum's existing computing power in the short term, but if there are no applications or users on it, the value of the forked chain will continue to decline, and the profitability of miners will continue to decline and erode, thus entering a death spiral and finally becoming a farce.

Finally, I hope that investors can recognize the technical differences in this Ethereum hard fork. I hope that, as Vitalik Buterin said, no one will lose money in the process of Ethereum hard fork; I also hope that the Web3 ecosystem will not be confused because of this.