Crypto 101

Ethereum’s Constantinople: from idea to the future

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During the last few weeks, there’s been a lot of buzz about Ethereum’s new hard fork called Constantinople. We’ve decided to investigate in details what makes this renovation so important and how it can help Ethereum move forward.

Ethereum’s hard forks

Typically, when talking about Ethereum’s hard forks the first thing that may come to your mind is Ethereum Classic. This fork occurred as a result of an ill-famous DAO hack that led to the theft of 3.6 million ETH (the equivalent of 70 million USD at that time). Vitalik Buterin, Ethereum’s creator, reversed the network to undo the transaction, but some part of the community disagreed and created a hard fork.

However, a hard fork does not always have to be a result of such critical events and cause the cryptocurrency split. In fact, the hard fork is the means of the network upgrade. Ethereum, just like any other IT project, has a solid team of developers behind it who work hard on improving its features. So whenever a set of new features is ready to be implemented, the community is ready to adopt them and thus the hard fork occurs without the network being split.

Ethereum’s development roadmap

The roadmap of Ethereum consists of 4 main stages:

  1. Frontier (the beta stage that aims to develop and test the decentralized applications)
  2. Homestead (is needed to stabilize the platform)
  3. Metropolis (the current stage)
  4. Serenity (upcoming)

Ethereum Constantinople is the part of the 3rd stage. It ought to have been finalized on August 13th, 2018, with 2 months of tests to follow after that and with the final release by the 2nd week of October. However, the release was delayed due to mistakes that developers found in the code on the testing stage.

What is Ethereum Constantinople

This new update aims to facilitate Ethereum’s long-expected shift from the proof-of-work (PoW)  to proof-of stake (PoS) protocol. The final shift should occur at the final stage called Serenity.

Vitalik Buterin calls it not a hard fork, but the network upgrade:

The proof-of-work algorithm requires spending lots of electricity in order to resolve difficult computational tasks. It becomes less cost-effective in time and has a negative impact on the environment.

The proof-of-stake algorithm eliminates these problems. It not only reduces energy consumption but also allows the network to scale and to process more transactions per second. Ethereum, in its current state, can only process 19 transactions per second at the maximum. So shifting to PoS is entirely justified in its case.

Suggested improvements for Constantinople

Changes that will be implemented in Constantinople are defined using EIPs (Ethereum Improvement Proposals) offered by developers. Among them are the following aspects:

  • Decrease the amount of gas needed for certain operations and thus make Ethereum cheaper.
  • Ensure that the blockchain is not frozen before PoS is ready and implemented.
  • Reduce block reward. For each newly found block, miners will get the reward of 2 ETH instead of 3 ETH. The same principle is applied to Bitcoin. The rewards halve every 210,000 blocks on the Bitcoin network which helps to reduce the inflation rate and ensure the cryptocurrency scarcity.
  • Difficulty bomb delay. The difficulty bomb is the mechanism that increases the energy required for mining on the old version of the blockchain. It is needed to push miners to switch to the new version as the old one will no longer be profitable. One of EIPs offers to put it off in order to smoothen the transferring to PoS.

What exchanges will support the new hard fork

Some huge exchange platforms have officially declared their support of Ethereum Constantinople. Among them are the following:

  • Binance
  • HitBTC
  • Bittrex
  • Huobi
  • CEX.io
  • Cryptopia

Other platforms still hesitate, but the possibility that they will follow once the exact date of the release will be named is quite big.

Summing up

Ethereum Constantinople is sure to become a really significant step in Ethereum’s development. Since there are already several working platforms such as EOS and Tron that come with much higher indices, Ethereum needs to strive hard in order to stay afloat.

The network upgrade has already been put off several times. As of now, Ethereum Constantinople release is re-scheduled for February 27th.

Let’s see how the development team moves on and when they eventually finalize the update.

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