Ethereum’s internal and external troubles

BM, with a mentality of watching the show, openly said after the Ethereum Constantinople plan was postponed: "The next hard fork of Ethereum is like the prize pool in 'Pixel Master (EOS Graffiti Game)'... It will be postponed forever."

Although the mine has been shut down for nearly five months, Lai Fushu has been paying attention to the developments of Ethereum. Regarding the postponement of Ethereum Constantinople, he said: "I feel that Vitalik has not been doing much."

In the view of technician Cheng Wei, it is not easy for Ethereum to switch from POW to POS, so delay is a normal thing.

But in fact, Ethereum's progress has been very slow. While its price has fallen, the performance of the main network has not yet been achieved.

After a myth of wealth creation, Ethereum is facing internal and external troubles.

Upgrade plan resisted by miners

"We invest in mining machines to make money. Does their technology have much to do with us?" Robin took out a cigarette and lighter from his pocket and took a deep breath.

In 2013, Robin started mining Litecoin, which cost 20 yuan at the time. When the price of Litecoin kept rising, Robin sold all of it with a 10-fold profit. This is one of the things that impressed Robin the most.

In 2016, Robin started mining Ethereum, when the cost price was 120 yuan. Later, when the price of Ethereum was 1,500 yuan, 3,000 yuan, and 5,000 yuan, he sold it. But what annoyed Robin was that he did not sell it when the price of Ethereum was at its highest point, nearly 10,000 yuan.

Currently, 95% of the mining machines in the Robin mine are mining Ethereum.

Panda Mining Pool also stated that 98% of its mining machines are mining Ethereum, and its computing power accounts for 1% of the total network computing power.

In fact, the vast majority of graphics card miners are mining Ethereum.

Smaller miners will switch to mining smaller currencies when Ethereum’s earnings are too low, but large mining farm owners will not switch at will to ensure earnings.

“Whether Ethereum collapses or not, does it have anything to do with me? I want to make money. At least there is still food to eat now, so I might as well take a bite first.” Robin once again emphasized that the purpose of miners mining is only to make money.

In Robin's opinion, after all, after the collapse of Ethereum, graphics card mining machines can still be used as computer hardware, so it is not a problem to sell graphics card mining machines at any time.

The purpose of miners is to make money, and anything that violates the principle of making money is an obstacle for miners.

Recently, the implementation of Ethereum's Constantinople project has become an obstacle for miners to make money.

The Constantinople Project is to "maintain and optimize" Ethereum, making technical improvements to network efficiency, fee structure, etc., while paving the way for Ethereum's expansion. This hard fork will delay the triggering of the Ethereum "Ice Age" difficulty bomb, which is necessary and beneficial for the development of Ethereum itself.

But the plan would harm the interests of miners.

In order to prevent blocks from being generated faster after the upgrade, Ethereum reduced the mining reward from 3ETH to 2ETH.

“Pushing Constantinople is good for the Ethereum mainnet, but it’s not a good thing for miners,” Robin continued.

Captain Yu, co-founder of the Mining Association, also said: "For miners, whether in a bear market or a bull market, the core of everyone's concern is always whether mining can still make money after deducting the cost of electricity. If not, the mining machines will stop. After all, not many people will mine at a loss."

In a bear market, the profits of all industrial chains are greatly reduced. To promote the implementation of the Constantinople plan, the reward for miners per block is reduced from 3ETH to 2ETH, which is undoubtedly continuously reducing the profits of miners.

"If the current profit is 100 yuan, and the market is not good in the bear market, and you want me to reduce the profit to 70 yuan, do you think I will be happy?"

In Robin's view, this is also the direct reason why miners did not switch their computing power to Ethereum Ropsten's test network after learning that the Constantinople test network was launched.

Miners' Anxiety

The upgrade was originally planned to be carried out on October 9 in the Ropsten test network, confirming 4.2 million blocks and undergoing about three weeks of test network operation testing. Constantinople is then scheduled to go online in early November.

However, on October 5, Ethereum core developers announced that they would postpone plans to release the Constantinople system upgrade project on the test network.

On October 19, developers confirmed at a meeting that the Ethereum Constantinople hard fork will be postponed to early 2019 due to consensus issues and code errors.

“In the mining community I’m in, almost no one has switched their computing power to the test network,” said Captain Yu.

Although miners do not have the right to participate in discussions on the implementation of the Constantinople Plan, the promotion of the plan still requires the cooperation of miners.

“During the implementation of the plan, we still need to reach a consensus with the miners to achieve a perfect match.” Robin believes that miners still play a vital role in the promotion of the plan.

In the eyes of miners, the reason why Ethereum's hard fork failed was the failure of consensus among network nodes, and the failure of consensus was mainly due to the lack of enough miners to advance the operation of the network.

There are two aspects to this: first, the token rewards of the test network have no value, and miners are unwilling to pay any time cost for it; second, a successful upgrade requires that most nodes on the Ropsten test network be upgraded to the latest software to start Constantinople, but in fact the upgraded nodes are not enough.

This also reflects that both miners and nodes lack interest in upgrading the Ethereum network.

Miner Lai Fushu said: "Everyone is anxious not only because of the reduction in production after the implementation of the Constantinople plan, but also because the overall market situation is not good and miners can't make that much money."

When the cryptocurrency market generally began to plummet in June, Uncle Lai Fu had already closed his mining factory.

A large part of miners’ income depends on the electricity cost. In fact, many miners cannot even reach this income.

Currently, miners are trying their best to reduce electricity prices while optimizing their machines to reduce power consumption and increase net profits.

Therefore, if production cuts are proposed in a bear market, miners will certainly not provide assistance.

After all, miners value existing profits. When the market is not good, they will look for more new currencies or high-yield currencies to mine.

Ethereum’s external and internal troubles

The postponement of the Ethereum Constantinople project was expected by Cheng Wei, who develops Dapp.

"In 2017, everyone was using Ethereum for ICO, and the value of Ethereum was reflected at that time. Because all ICOs were using it, although the network was somewhat congested, the price of the currency continued to soar," said Cheng Wei.

But the price of a currency is not only determined by consensus, but also by the commercial value behind the currency.

After June 2018, the cryptocurrency market remained sluggish.

Although the number of coins is increasing, the utilization rate of coins is decreasing. At the same time, there is no new capital entering the entire currency market, but a large amount of capital is flowing out every day, so the price of coins has not risen.

As the price of the currency fell, the performance of the Ethereum mainnet was not up to par, and developers encountered many difficulties in developing the project.

Currently, blockchain Dapps on the market are mainly divided into two categories: one is "mobile phone mining"; the other is "blockchain games".

“I’ve never played any games on Ethereum. They look rubbish.” Cheng Wei said that he only conducts research and development based on the EOS mainnet.

Cheng Wei explained: “Technology research and development is also for making money. The performance of Ethereum mainnet is not up to standard, and the profit effect of developing Dapp is low.”

In September, according to Dappradar data, the weekly turnover of Dapps on EOS was twice that of ETH. At the same time, EOS Dapps far surpassed ETH Dapps in both daily activity ranking and transaction volume ranking.

Since the birth of EOS, it has claimed to be a benchmark against ETH and has been competing with ETH on a technical level.

"I feel like Vitalik isn't doing much anymore." Although Lai Fushu no longer mines, he still follows the developments of Ethereum.

But in Cheng Wei's view, delays in technology development are normal, and it is not easy for Ethereum to switch from POW to POS.

Currently, there are more than 1,000 Dapp applications on Ethereum. As of xx time on November 5, according to Dappradar data, the number one on Ethereum is the exchange application IDEX, a decentralized exchange, with 12,900 daily active users, which is only nearly one-tenth of the number one gambling application BET24 on EOS.

The problem Ethereum is currently facing is low TPS. Under the performance of the underlying public chain transactions, it cannot meet the throughput requirements of Dapp, and an increase in transaction frequency will cause serious congestion.

“It’s not that R&D personnel don’t want to develop advanced applications, but the support strength of the public chain itself can only reach this level.” Cheng Wei’s tone was full of helplessness.