Ethereum Constantinople Fork: Everything You Need to Know

Historically, market fluctuations during Ethereum hard forks will go through three stages.

Text | Rufeng, Moni, Zhang Xue, Huang Xuejiao, Lu Xiaoming (Part of this article is translated from coinswitch and cointelegraph)

Editor | Lu Xiaoming

The Constantinople fork is the most important topic in the blockchain field recently. Odaily Planet Daily has compiled everything you need to know.

The competition for the second spot in the recent cryptocurrency market cap rankings seems to be very fierce. After a brief reversal by Ripple, Ethereum has now returned to the second spot and is trying hard to maintain its lead and stay there for a longer period of time.

On December 29, 2018, the price of Ethereum surpassed $150, and the market value reached $15.3 billion. Since mid-December last year, the market value of Ethereum has doubled from about $8 billion to nearly $16 billion. Some people believe that this price growth may be due to the upcoming Constantinople Ethereum Hard Fork.

Despite a slight rebound recently, the price of Ethereum has fallen by 20% compared to its historical high in 2018. Many platforms and companies based on the Ethereum blockchain are facing regulatory pressure from the U.S. Securities and Exchange Commission because the digital token products issued by these platforms and companies may be unregistered securities.

Ethereum has a set development path, and developers must perform hard forks regularly to ensure that Ethereum can continuously update the latest technology. Developers have discovered that the difficulty bomb written in Ethereum will cause the decryption speed to slow down at a certain point in time, and it is likely to cause blocks to be unable to be mined, which will in turn restrict the development of the entire Ethereum blockchain.

In fact, Ethereum has experienced multiple forks, one of which was related to a hacker attack, which eventually led to the emergence of Ethereum Classic (ETC). Odaily Planet Daily sorted out the previous 7 forks (for details, please click "History confirms that after the "Constantinople hard fork", the price of ETH will show a downward trend").

The upcoming Constantinople hard fork is expected to significantly improve Ethereum’s performance, and some major changes such as mining rewards mentioned in the Ethereum Improvement Proposal (EIP) will also be implemented in this hard fork.

Now, the upcoming Constantinople hard fork is expected to significantly improve the performance of the Ethereum blockchain, and some major changes such as mining rewards mentioned in the Ethereum Improvement Proposal (EIP) will also be implemented in this hard fork.

Ethereum Constantinople hard fork details: Mining revenue reduced, transaction fees lowered

According to Odaily Planet Daily, in the overall development plan announced by Ethereum, the release of Ethereum is divided into four phases, namely Frontier, Homestead, Metropolis and Serenity.

A hand-drawn, concise version of the Ethereum fork history (from MyCrypto)

Currently, the Ethereum network has been upgraded to the "Metropolis" stage. The "Metropolis" upgrade requires two hard forks, namely "Byzantium" and "Constantinople". Ethereum founder Vitalik is Russian, and Russia has historically inherited the mantle of the Byzantine Empire, so the Ethereum team named the two hard forks by Byzantium and Constantinople.

According to the observation and compilation of the self-media Entropy Chain, Byzantium was originally an immigrant city established by the ancient Greeks. Later, the Roman Emperor Constantine the Great expanded and moved the capital here, renamed it Constantinople, making the city a historical town and successively the capital of the four major empires of Rome, Byzantium, Latin and Ottoman. The development process of Ethereum can be seen as the development process of a city.

Ethereum is currently in the Metropolis stage, which has two major parts. Both parts represent important changes to Ethereum's underlying protocol, which is a hard fork of Ethereum.

According to the agreement of the 49th Ethereum development meeting, the "Constantinople" hard fork is tentatively scheduled for January 16, 2019, and will be activated at block height 7080000. The upgrade includes five improvement plans:

• EIP 145: A technical upgrade authored by two ethereum developers, Alex Beregszaszi and Pawel Bylica, EIP145 details a more efficient way of processing information on ethereum called Bitwise Shifting.

• EIP 1052: Written by core developers Nick Johnson and Bylica, EIP 1052 provides a way to optimize large-scale code execution on Ethereum.

• EIP 1283: EIP 1087, authored by Johnson, is a proposal that primarily benefits smart contract developers by introducing a fairer pricing method for changes to data storage.

• EIP 1014: Proposed by Ethereum founder Vitalik Buterin, the purpose of this upgrade is to better promote specific scalability solutions based on state channels and off-chain transactions. As more things are moved to the second layer, many current performance issues can be solved.

• EIP 1234: Hosted by Afri Schoedon, the release manager of the major Ethereum full node wallet Parity, this is also the most controversial improvement proposal in the upgrade, reducing the block mining reward from 3 ETH to 2 ETH and delaying Ethereum's difficulty bomb for 12 months.

The upgraded Ethereum network is lighter, faster, and more secure. However, the following points are worth noting:

1. EIP-1234 is the most controversial project, which proposes to reduce the block reward after the "Byzantium" hard fork from 3 ETH to 2 ETH, which will greatly reduce the income of miners.

2. Currently, Ethereum's POW is a proof-of-work mechanism. In the future, it will gradually transition to a POW+POS hybrid mechanism and then to pure POS. Miners' income will decrease and traders' fees will be reduced.

3. Since the POW mechanism is mostly looking for random numbers during the mining process, the energy and resources used to find random numbers will disappear forever. After Ethereum upgrades the POW+POS mechanism, the waste of electricity resources caused by mining will be reduced.

4. Unlike the hard fork caused by the DAO incident, "Constantinople" is the result of an upgrade based on the "Byzantine" protocol, which has been unanimously agreed upon by developers, so there will be no split and no new coins will appear.

In other words, the biggest losses after the Constantinople upgrade will be suffered by existing Ethereum miners. This has aroused the opinions of some miners, who hope that the ASIC-resistant algorithm ProgPoW can also be added to this upgrade.

Babbitt reported that Ikmyeong Na, a ProgPoW contributor who calls himself the "Voice of Miners", even said on Github: "If ProgPOW and EIP-1234 are not bundled together, it will only be a disaster for GPU miners. I expect more than 30% of Ethereum miners will go bankrupt." That is, the number of Ethereum nodes will be significantly reduced.

The twists and turns of the Constantinople fork

The hard fork was first decided in September last year and was scheduled for mid-October. On September 15, the core developers of Ethereum decided to launch an ETH hard fork called "Constantinople" in Ropsten. The fork plan adopted the proposal of Afri Schoedon, the developer of Parity, the main Ethereum client, EIP1234.

On October 5, Ethereum core developers announced for the first time that they would postpone the release of the Constantinople upgrade version on Ropsten. The main reason was that there were still some vulnerabilities in this version. The new upgrade time was set when the Ropsten block reached a height of 4230000 (approximately arriving in the early morning of October 14). The upgrade will take about 3 weeks of testing time and the test network upgrade is expected to be completed in early November.

However, by the morning of the 13th, the upgrade had failed and was ultimately delayed until this year.

According to Cointelegraph, the reason why Ethereum’s hard fork failed in mid-October last year may be due to a “consensus” failure among network nodes.

What does it mean that there is a consensus problem? Nulltx.com did a further analysis and believed that the main reason for the failure of this upgrade was that there were not enough miners to advance the network:

• Because the token rewards of the test network have no value and the network does not require many miners to process transactions, the test network does not have enough miners.

• For the upgrade to be successful, most of the nodes on the Ropsten test network must be upgraded to the latest software to launch Constantinople. Now it turns out that the upgraded nodes are not enough. The media also said that this is a worrying sign because it suggests that many nodes lack interest in network upgrades.

• The third is the upgrade time. Nulltx.com said that it can now be seen that this weekend is a bad time for the testnet upgrade, when few people were monitoring the upgrade.

The upgrade failure also caused the team to face some criticism from the community. Hudson Jameson created a special Reddit thread to communicate with the community, and the comments included:

You have no idea how competitive this space is. This huge and useless hard fork delay has a very negative impact on Ethereum's credibility. -Produde (@Dudtrade)

“At this rate, we won’t get to Casper until 2030.” @TrueValueCapital

But some expressed understanding and support, even joking that miners might be happy about the release delay.

“I’d rather they delay and then need 3 last minute emergency patches like last year. Take your time and do it right. Software development isn’t easy.” @potatodotexe

"Just keep doing what you need to do to stay safe, thanks for all the great work." @clarkster

Although the upgrade failed, as some developers said, this is why it is necessary to test on the test network before the official upgrade, just to find out the problems, which is not a bad thing after all.

However, the outcome of this hard fork is also unclear.

The impact of Ethereum hard fork on coin price and ecology

The entire cryptocurrency ecosystem seems to be waiting for the first and probably the most important hard fork of 2019. There is no doubt that this hard fork will have a huge impact on the price of Ethereum, as Ethereum will be presented with a brand new version and will help its future development. We expect that the price of Ethereum can go higher after this hard fork, while other cryptocurrencies may suffer in the short term during this period. In the past three weeks, the price of Ethereum has risen by 85%. The hard fork seems to have played a positive role in driving the price of Ethereum up, which is also good news for coin holders.

Analysts believe that the upcoming Constantinople hard fork will reduce mining rewards from 3 ETH to 2 ETH, which will reduce the new ETH supply, leading to price increases. Before the fork, the ETH market will continue to remain favorable and will not be easily pulled down.

A similar situation also occurred in the Bitcoin Cash hard fork. Before the Bitcoin Cash hard fork, its price rose while other cryptocurrencies suffered a long period of lows. However, the result of the "fork war" caused BCH to fork into BSV and BCH, but the total market value of BSV and BCH after the fork is not as good as the market value of BCH before the fork.

Based on the historical market performance of Ethereum, Odaily Planet Daily found that during the hard fork period, the market fluctuations will be in three stages:

1.Prices usually rise before a hard fork;

2. Prices peak during the hard fork, and shortly before and after it;

3. After the hard fork, the price of ETH began to fall back and adjusted at different positions.

In fact, it is difficult for us to predict the long-term impact of the Ethereum hard fork, but it is clear that Ethereum is currently at a very critical stage. Can it successfully pass this important transition period? Let us wait and see.

What do users need to do?

Generally speaking, ordinary users don’t need to do anything, just put the coins in an exchange that supports the fork and wait for the fork to be finalized. The exchanges that have supported the Ethereum Constantinople fork include (incomplete statistics): Huobi Global Station, Binance, OKEx, Bibox, IDEX (Aurora), Bitforex...

Users who run the Ethereum client on their own servers or computers need to update it themselves.

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I am Lu Xiaoming, editor of Odaily Planet Daily. I am exploring the real blockchain. If you want to expose information or communicate, please add lohiuming. Please note your name, unit, position and reason.

Related reading:

History confirms that after the "Constantinople Hard Fork", the price of ETH will show a downward trend

At the time of the hard fork, ETH soared. Will Ethereum 2.0 come?

Ethereum hard fork upgrade test failed, mainly because not many miners were working on weekends?

Constantinople hard fork activation point determined, Ethereum developer meeting implements major reforms

Ethereum’s “difficulty bomb” has been delayed again. When will it explode?