Constantinople fork postponed again, Ethereum "moving forward with heavy burden"

The Constantinople hard fork has been full of twists and turns. Like all reforms, the change of old rules inevitably faces technical challenges and differences of opinion. Ethereum is "carrying a heavy burden" on the long road of reform.

This is not the first time that the Ethereum Constantinople hard fork has been delayed.

All changes mean changing old rules and systems, which are inevitably accompanied by technical difficulties, conflicts of interest and differences of opinion.

Since the second half of 2018, the price of Ethereum has dropped sharply. The postponement of this upgrade has caused the price of Ethereum to plunge by 6%. As of 8:00 on January 16, 2019, Ethereum (ETH) has fallen 92.03% from its peak price, and the temporary price is about US$119.98. Compared with other cryptocurrencies, Ethereum has not shown its absolute advantage as the pioneer of blockchain 2.0.

On October 8, 2018, the Ethereum core developers announced that the Constantinople upgrade on the Ethereum test network Ropsten would be postponed to October 14. However, due to consensus issues on October 14, the upgrade failed again. It was not until November that the Constantinople fork was scheduled for January 2019. Unexpectedly, in the early morning of January 16, Ethereum hard fork coordinator Afri Schoedon confirmed on Reddit that due to security vulnerabilities, the Ethereum core developers decided to postpone the hard fork again, and the new fork time will be decided at the meeting this Friday.

According to a smart contract review security company, this vulnerability will cause lower transaction fees for some operations on the Ethereum blockchain, and hackers can use certain instructions of Ethereum smart contracts to launch a "reentrancy attack."

"Security vulnerabilities cannot be 100% avoided. It is better to find them before the upgrade than after the upgrade, so delaying the upgrade is not the worst outcome." The head of Silicon Valley R&D at Paidun Technology told the ChainDD App, "I don't think delaying the upgrade is a bad thing, and it's best to be cautious."

The Constantinople hard fork has been postponed, keeping all spectators and participants on edge. However, the significance of this Ethereum upgrade and the many difficulties that need to be solved will not be diminished by the "delay in time".

Ethereum is burdened

“Over the past year, most public chains have made little progress.” Ultrain CEO Guo Rui predicted when he was a guest at Liande in March 2018 that a disruptive public chain would emerge before 2019.

Now I think, “I may be too optimistic. The development of public blockchain technology is relatively slow at present, and it has little to do with funding.”

As the pioneer of blockchain 2.0, the changes in the landscape caused by Ethereum's upgrade are bound to affect people's hearts. The PoS consensus mechanism replaces the current PoW consensus mechanism, and the interest incentive mechanism faces adjustments. A series of chain reactions have aroused everyone's nerves.

"I think Ethereum is under pressure now," Guo Rui told ChainDD. Ethereum is currently quite large, with about 1 million mining machines, which are worth nearly 10 billion yuan. In addition, there are also many Ethereum miners. If the PoW mechanism is really changed to the PoS consensus mechanism, it means that these mining facilities will no longer be able to generate income.

Reforms naturally involve sacrifices. If the interests of all parties are not properly coordinated, Ethereum is likely to gradually decline or even disappear during the upgrade process. This has become a concern for many industry insiders.

Ethereum is a milestone for the blockchain industry and provides a good model for public chain developers. But this does not mean that its technology is always the most advanced and innovative.

For public chains like Ethereum, which have the attribute of "evangelists", on the one hand, they were developed earlier and have a large number of users; however, on the other hand, the technology they initially adopted was also immature, and there may be problems such as insufficient performance and low security. For example, in the case of Ethereum, Vitalik Buterin has always wanted to use the PoS mining mechanism, but PoS was only a concept at that time. Therefore, Ethereum can only use the "planned" method to make the transition, but the cost is huge and the process is relatively slow.

Five new upgrades (EIPs) for the Constantinople fork

“This is just a normal upgrade of Ethereum,” Ultrain CEO Guo Rui told the ChainDD App.

“Such software upgrades happen almost every day in the Internet field. The difference is that in centralized networks, upgrades do not require user consent, while in decentralized blockchain networks, upgrades require user approval and may therefore cause disagreements.

As Ethereum founder Vitalik Buterin said on Twitter, it would be more appropriate to call the Ethereum Constantinople hard fork a “network upgrade.”

The emergence of Ethereum is a milestone for the blockchain industry. It provides people with a possibility: blockchain is not only the underlying technology of Bitcoin, but also can provide developers with scenarios and technologies to build and publish distributed applications.

Constantinople is the fifth system upgrade of Ethereum and is also a planned upgrade. In fact, Ethereum (ETH) was designed to eventually adopt Proof of Stake (PoS) to maintain the security of transactions, replacing the inefficient and resource-intensive Proof of Work (PoW). Vitalik Buterin once predicted that after Ethereum switched to the PoS mechanism, mining energy consumption would be reduced by 99%.

Jeff Liu, head of Paidun Technology's Silicon Valley R&D Center, told the ChainDD App that PoW is essentially a competition of computing power, and its large energy consumption has always been criticized. However, PoS's "token mortgage" can save a lot of energy. The security of the PoW mechanism is mathematical, that is, to attack a token, you must pay more than 51% of the computing power, while the security of the PoS mechanism is more like economics, and there is no strict mathematical proof. In the PoS mechanism, it is harmful to both others and yourself for large coin holders to use their own coins to attack the system.

“The security of the PoW mechanism lies in “cannot be attacked”, while the security of the PoS mechanism lies in “cannot be attacked” because it will harm one’s own interests.”

However, this hard fork is more like a preparatory step and does not introduce the PoS consensus mechanism.

According to the plan of the Ethereum team, they hope to establish a reliable digital cryptocurrency system through PoW in the early stage, and then gradually transition to the PoS mechanism. To this end, Ethereum divides its development route into four stages: "Frontier", "Homestead", "Metropolis" and "Serenity". The first three stages use the PoW consensus mechanism, and the fourth stage is transformed into PoS. The four stages are converted through hard forks.

Metropolis aims to transform Ethereum's consensus algorithm from proof-of-work (PoW) to a hybrid consensus algorithm of proof-of-work and proof-of-stake (PoS). It is considered to be a transitional stage from the PoW mechanism to the PoS mechanism, aiming to improve the efficiency of the entire Ethereum blockchain, reduce costs, and ultimately achieve a PoS pure equity consensus algorithm. At this stage, mining rewards become less and the difficulty becomes greater. Due to the complexity of the process, "Metropolis" is divided into two upgrade stages: Byzantium and Constantinople. The Byzantium hard fork was successfully upgraded in October 2017. The Constantinople fork will be launched on January 16, 2019 and is expected to be completed on January 17.

Taylor Monahan, CEO of Ethereum wallet MyCrypto, described the overall goal of the Constantinople upgrade as “purely quality improvements for contract development.”

One Piece, the head of SlowMist security, also said that Ethereum currently has problems such as low performance and TPS, network congestion, and excessively high transaction fees, and the "Constantinople Upgrade" is designed to solve these problems.

It is understood that the current specific changes involve 5 improvement protocols (EIPs): EIP145, EIP1014, EIP1052, EIP1283, and EIP1234. Among them, EIP 145 describes in detail a more efficient Ethereum information processing scheme, which is called bitwise shifting. EIP 1052: provides a method to optimize large-scale code execution on the Ethereum network. EIP 1283 mainly introduces a fairer pricing method for data storage changes, which can benefit smart contract developers. EIP 1014 was created by Ethereum founder Vitalik Buterin himself. The purpose of this upgrade is to better promote expansion solutions based on state channels and off-chain transactions.

The first three upgrade proposals are aimed at upgrading the performance of Ethereum, and the upgraded Ethereum will provide a better experience for software developers and Dapp developers. In contrast, EIP 1234 is more controversial because it delays the difficulty bomb by 12 months. Ethereum's "Difficulty Bomb" refers to the increasing difficulty of using Ether to reward miners on the blockchain in the mining algorithm. This delay will cause the block reward of the Ethereum network to be reduced from 3ETH to 2ETH.

"There are differences among different interest groups. The most important significance of this Ethereum hard fork is the impact brought about by EIP 1234," said Guo Rui.

Huobi Blockchain Research Institute also pointed out that EIP 1234 may pose a potential threat similar to the internal split of the BCH community. The difference is that BCH is a split between two technical teams, and the two technical teams are supported by mining farms respectively. If a split occurs in this Ethereum upgrade, it can only be a split between the technical community and the miners, and it will also be an experiment in the governance of the technical team and the miners.

The “Zero-Sum Game” between Developers and Miners

EIP 1234 reduces the block reward of the Ethereum network from 3 ETH to 2, which will undoubtedly increase the difficulty of mining for miners and make them dissatisfied. This means that they get less ETH for the same amount of work. But this is the only way for Ethereum to achieve its goal of becoming a "world computer".

Guo Rui said that developers and users of public chains often look at things from different perspectives. Developers pay more attention to long-term interests, such as the Ethereum upgrade plan to continuously increase TPS, improve smart contracts, reduce resource consumption, and provide a better platform for application developers.

Public chain upgrades are like a "zero-sum game". Miners are more concerned about short-term benefits. Compared with public chain developers, whether they can use coins to exchange for money to pay for next month's electricity bill is a more urgent need for miners.

The adjustment to reduce block rewards was experienced as early as October 2017 in the Byzantium fork. In the Byzantium hard fork EIP 649, the difficulty bomb was postponed for one year, and the block reward was reduced from 5 ETH to 3 ETH. However, miners did not have a big disagreement because of this. At that time, the cryptocurrency was in a bull market, and the price of ETH was on an upward trend. Although the ETH mined by miners decreased, the total income did not decrease.

"The reduction in block rewards means that Ethereum will be "produced less." Jeff Liu, head of Paidun Technology's Silicon Valley R&D Center, told the ChainDD App that, just like deflation, fewer coins may mean that the price of each coin will increase. Overall, the impact on miners may not be as great as people imagine.

According to Ethereum's plan, in the "serenity" phase, the consensus mechanism will be changed from PoW to PoS. PoS means that the more coins you hold, the easier it is to mine. From this point of view, people who believe in Ethereum will not stop acquiring ETH.

Liande App understands that although the issuance of ETH will decrease with the implementation of EIP 1234, the issuance of ETH after the implementation of the Constantinople upgrade is still significantly higher than the chain after the difficulty bomb is triggered.

“It mainly depends on the future price of Ethereum,” Jeff told the ChainDD App. “In fact, the same idea applies to Bitcoin, which drops by half every two years. But if the price of Bitcoin doubles or even more, there is no problem with such a change. The price depends to a certain extent on the number of users.”

As a public chain entrepreneur, Guo Rui believes that technology may only account for about 60% of the factors that will affect the development of public chains in the future, and network governance will also determine the success or failure of public chains.

Internet governance is more of a sociological thing, including organizational structure, distribution, and balancing the interests of all parties.

The Constantinople hard fork is not the first upgrade of Ethereum, nor will it be the last.

The road ahead is long. Will this step be successful? Let’s see how Vitalik plays this governance game well.