Ethereum difficulty bomb postponed for the fifth time, POW finalization may be delayed again

On August 20, Ethereum core developer Tim Beiko said in a review of the development team conference call that the difficulty bomb in December might be postponed, but there would be no new EIP before the merger. This is likely the fifth time the difficulty bomb has been postponed. Why is the difficulty bomb postponed again and again?

The significance of the difficulty bomb

The difficulty bomb is a switch that causes the difficulty of Ethereum mining to rise rapidly. The difficulty of Ethereum mining is not only related to the block time of the previous block, but also to the difficulty factor of the block.

Specifically, the difficulty factor includes the target block height for the difficulty bomb to be activated. When the block height does not reach the target value, the mining difficulty is only affected by the block time of the previous block; once the block height reaches the predetermined value, the block time will increase exponentially, and then the difficulty will be adjusted once every 100,000 blocks mined.

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Why does the transition from PoW to PoS require a difficulty bomb? Understanding this question will help us understand the order of the difficulty bomb and ETH2.0. First of all, we need to accept the fact that PoW will exit the stage of history after the completion of ETH2.0. There will be no coexistence of the two consensuses, and the completion of the ETH2.0 merger phase will be the end of the PoW mining method.

In this regard, there is a voice in the huge miner community that attempts to implement a fork after the merger of Ethereum 1.0 and 2.0. This will undoubtedly be a lose-lose situation for the entire Ethereum community, so the development team needs to find a way to prevent such incidents from happening. We know that due to the existence of Vitalik, the Ethereum development team is relatively easy to unite; but the miner team is not the same. Decentralization makes it impossible for all miners to form a community of interests. In other words, as long as miners can distrust each other, they will not have enough computing power to achieve a 51% attack.

The difficulty bomb is a conspiracy to make miners distrustful. According to Stephan Tual's estimate, it will take about a year for Ethereum to rise to a level where it is almost impossible to mine blocks after the difficulty bomb is activated. This means that there will be at least a few months from the time the difficulty bomb is activated until miners are unable to make ends meet, and this period of time is the time to disintegrate the miners' camp.

Considering that the higher the block height, the more difficult it is to achieve a fork, miners cannot wait until there is no output before starting the fork, but should start taking action as soon as the difficulty bomb is activated. However, imagine that as a rational individual miner, would you try to fork the main chain when the difficulty bomb is activated? In fact, you will worry: if some miners do not work together to fork, but continue to mine on the original longest chain, then their output will increase significantly, even exceeding the loss caused by the difficulty bomb. Once the fork fails, these "betraying" miners will make a lot of money, while the "united" miners will get nothing. Therefore, rational miners will choose to continue mining along the main chain (or choose to leave at a reasonable exit price). Even if they know that the final result is zero output, no one is willing to take the lead in taking risks.

By understanding the meaning of the difficulty bomb, we can naturally understand the order of its activation time and the ETH2.0 merger time. As mentioned above, the existence of the difficulty bomb is to prevent the collective fork of miners when Ethereum 1.0 and 2.0 merge. Therefore, if Ethereum has successfully completed the merger, then the difficulty bomb has no meaning. The reason why the final activation time of the difficulty bomb is regarded as a leading indicator of the end of PoW is based on this logic.

Historically, the difficulty bomb has been activated three times and postponed four times. The four postponements occurred in the Byzantium upgrade, Constantinople upgrade, Muir Glacier upgrade and the just-concluded London upgrade.

In short, the merger means the end of PoW, and the complete explosion of the difficulty bomb means the completion of the merger. The end of PoW will not be until the second quarter of 2022 at the earliest, and the difficulty bomb only takes two or three months from activation to complete explosion. Therefore, if the difficulty bomb is activated in December, Ethereum must complete the merger in the first quarter of next year, which is a difficult task.

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