One week left before Ethereum fork, will the price go up? Will there be new coins? Will miners stay? | 8btc exclusive

One week left, Ethereum will undergo Constantinople fork.

After interviewing several big names in the mining circle, I found that corresponding to the importance of this matter is the industry's extremely abnormal indifference. The reasons behind the indifference are polarized. The old ones are fed up with it, and the new ones are confused.

For example, the following experts responded to me like this:

Zhu Yu, co-founder of Biyin Mining Pool: Two words, messing around. Shenyu, founder of F2Pool: It’s within expectations, and people are crying wolf more often. Xiong Yue, COO of Bixin: I don’t have any opinion, it’s a planned upgrade, so there’s nothing to worry about.

Well, if you are like them, and you are well aware of the Ethereum developers' long-announced weight plans and repeated postponements, then congratulations, you are not a potential reader of this article. On the contrary, if you are confused at the moment, and happen to be a miner or an ETH holder, please read on patiently.

Previous article: What exactly is the purpose of forking?

Simply put, the story goes like this… When Ethereum was designed in 2013, it used the same POW mechanism as Bitcoin. Later, Vitalik Buterin felt something was wrong, and he proposed the famous “Seven Deadly Sins of Cryptocurrency,” one of which is that “POW is a money-burning machine, while POS is energy-efficient and secure.” Therefore, the history of Ethereum’s technological upgrades can be seen as a history of the transformation of the consensus mechanism, as well as a history of procrastination by the Ethereum development team.

Ethereum is designed to be divided into four stages: Frontier, Homeland, Metropolis, and Tranquility. The Metropolis stage will execute two hard forks, Byzantium and Constantinople. We are now on the eve of the Constantinople hard fork.

It is worth noting that when the quiet phase arrives, the Ethereum consensus algorithm will change from POW to POS, and this change means a change in the power of miners. In order to prevent miners from unitedly resisting and fighting to the death on the old chain, Ethereum developers planted a seed called "difficulty bomb" in the frontier stage. By adjusting the difficulty algorithm, miners will slowly lose their jobs and the seed will be completely detonated in the quiet period. This process is also called the "Ice Age".

Back to the topic, after many twists and turns and repeated postponements, the Constantinople hard fork finally arrived, which means that miners have reached the last moment to make a choice.

On December 8, the Ethereum core development team announced that they had reached an agreement on the activation time of the Constantinople hard fork, setting block 7080000 as the activation point, and it is expected to go online between January 14 and 18.

Therefore, Babbitt interviewed several mining pool operators, mine owners, and chip developers who are closely related to this interest to hear what they plan to do.

Core dialogue: Will the price go up? Will there be new coins? Will miners stay?

1. What are the fundamental changes after the fork?

After the Constantinople hard fork, the most significant changes are: the difficulty bomb is delayed for one year, the block reward is reduced from 3 to 2, the ETH production is reduced by 30%, and the Gas calculation method is adjusted.

Shenyu, founder of F2Pool: This is a normal hard fork. Everyone has been expecting Ethereum to iterate quickly and solve some existing problems. Because technological development has encountered many bottlenecks, this hard fork did not introduce many core technologies. For miners and users, the biggest concern is that the difficulty bomb has been delayed for 12 months, reducing Ethereum's output to one-third, thus leaving a transition period for future technological upgrades.

Chen Lei, Secretary General of Peking University Blockchain Club (mine owner): The first is to delay the difficulty bomb for one year, reduce the number of blocks from three to two, and reduce ETH production by 30%; the second is some small upgrades or optimizations, some technical improvements, running faster, lower transaction fees, faster smart contract verification, but none of them are major performance upgrades; the third is to add a state channel.

The impact of the fork needs to be viewed from the perspective of three interest groups: miners, developers, and users:

2. What impact will it have on miners?

For miners, reduced mining revenue means higher costs for mining machines, which may further exacerbate downtime. The Istanbul amendment to the algorithm announced at the Ethereum Development Conference a few days ago may cause the equipment that Ethereum ASIC manufacturers are about to launch to be unsalable.

Panda Miner: After the Constantinople fork, the Ethereum block reward will be reduced from 3 ETH to 2, and the coin income of miners will decrease by 33%, which means that the cost of mining a single ETH will increase by 50%. According to the current mining difficulty, the electricity cost of mining a single ETH is estimated to be around 900 yuan; if the current coin price can be maintained at more than 1,000 yuan per coin, there will not be a large-scale shutdown of miners, and most of the current stock of miners can continue to maintain.

BTC.com CEO Zhuang Zhong: The most obvious change is that blockchain rewards have decreased, so miners may switch computing power from Ethereum to other currencies. This requires miners to weigh the pros and cons, because if a large amount of computing power is switched to small currencies, it will also lead to a surge in mining difficulty.

Chen Lei, Secretary General of Peking University Blockchain Club (miner): Production reduction may cause frequent shutdowns of ETH miners, but overall, it will only affect 20% to 30%, and the flood season in April may be the critical period. What is more noteworthy is the Ethereum Developer Conference a few days ago, which will make Istanbul corrections to the algorithm. At present, the possibility of changing the algorithm in the next fork is very high, which will be a big blow to Ethereum mining machine manufacturers, and the machines they are about to put into use may be smashed in their hands.

Babbitt: What countermeasures do miners have?

Panda Miner: In order to prevent the situation where the electricity costs cannot be recovered by mining ETH, many miners will choose to mine some small currencies, such as the recently launched beam, etc.; or they can hedge through financial instruments at the current price of Ethereum or after it rises further.

Resisting Asic mining machines has always been the main theme of the Ethereum community. If the algorithm is to be changed, it is mainly to resist Asic models and improve the efficiency of GPU-based network mining. Panda Miner's business is mainly based on GPU mining machines, and changing the algorithm is good news for us GPU miners.

Zhang Li, the "Wolf God" of the Mining Association: If the price falls below the cost, the machine will basically be shut down; the modification of the algorithm is aimed at ASIC, and the impact on graphics cards is not that big, it is a kind of difficulty bomb; currently the only ways are to reduce power consumption or update equipment.

F2Pool founder Shenyu: We are launching new coins to find a way out for graphics card miners.

BTC.com CEO Zhuang Zhong: Our browser is already ready and will provide data analysis related to mining rewards for miners’ reference. We are also paying attention to some new currencies, which will be released in the near future.

Babbitt: How do miners grasp the opportunity to switch from POW to POS?

Zhang Li, the “Wolf God” of the Mining Association: I personally think that POS will not work in the short term, and we will have to wait until the fork to see what happens.

Panda Miner: The transition from POW to POS is a gradual process. At this stage, if miners still believe in the future of Ethereum, it is actually a good time to hoard coins, because in the POS stage, miners can pledge their ETH to be nodes to obtain ETH income. In addition, for the GPU miners in hand, miners need to find and participate in the community building of some potential POW currencies, such as the recently popular AE, Grin and Beam, etc. These currencies provide new mining opportunities for GPU miners.

BTC.com CEO Zhuang Zhong: Since the announcement of Ethereum's casper mechanism, it has been repeatedly modified and postponed. Recently, a version of the plan has just been released. We still need to continue to pay attention to this aspect. This upgrade is just a transition. In the next quiet stage, Ethereum will completely convert to the POS mechanism. Whether Ethereum holders will accept such a conversion and whether miners will jointly boycott it is still an unknown number and it is difficult to predict at present.

3. What impact does it have on developers?

For developers, the improvement of Ethereum's performance will make smart contract verification faster, and the adjustment of the Gas algorithm will significantly reduce DAPP transaction fees, which will have the effect of disguised expansion and be more developer-friendly.

BTC.com CEO Zhuang Zhong: When the test chain was launched, due to communication problems among developers, some bugs occurred, which delayed the launch of the main chain again and again. I believe that the developers have made full preparations this time. For developers, the biggest change in the Constantinople upgrade is the adjustment of the Gas calculation method, which will significantly reduce the DAPP handling fee and bring about a disguised expansion effect to a certain extent.

4. What impact will this have on coin holders?

For coin holders, this hard fork will most likely not generate any new coins. The recent rise in Ethereum prices is also due to the expectation of the fork, but the continued market trend after the fork is difficult to predict.

BTC.com CEO Zhuangzhong: Constantinople is the last version of Ethereum before the transition to POS. Unlike the previous ETC fork, this one does not involve philosophical debates, but is merely a technical upgrade and improvement. Although theoretically, hard forks can generate new coins, developers, mining pools, exchanges, and wallets have reached a high degree of consensus, and it is unlikely that there will be concepts such as new coins and candies. The latest version already includes the hard fork code, so the whole process will become very smooth and there are unlikely to be any twists and turns.

As the supply decreases, people will have a psychological expectation of price increases, but I think the recent rise in Ethereum prices is only weakly related to the Constantinople fork. It may be more due to the support of confidence. Everyone sees that Ethereum developers are still working and the technology is still evolving.

Chen Lei, Secretary General of Peking University Blockchain Club: The upgrade expectations have been released ahead of schedule and will not bring greater growth. I think the overall trend of the current market will not change much as a result, and there may even be downward fluctuations after the upgrade.

The above is Babbitt’s interview with the bigwigs in the mining circle. We hope to clarify some of your confusion about the Constantinople fork, especially to provide some useful suggestions for miners. If you have other questions about the fork that have not been answered, please leave a message. Babbitt will continue to pay attention to the subsequent progress of the fork.