The coming Ethereum hard forks explained
The Ethereum community along with cryptocurrency enthusiasts and cryptomarket players are anticipating a major upgrade of the Ethereum network called Metropolis. It will include 2 parts, 2 hard forks: Byzantium, which is expected to take place at block 4.37 million on October 17th, 2017, and Constantinople, the date for which is yet to be announced.
We at Freewallet have been getting a lot of questions about the coming hard fork, which is why we decided to answer them in a special article. We hope it will help our users understand the changes the Ethereum network is going through a bit better.
What is a hard fork?
A hard fork in general is a significant change applied to a blockchain protocol that validates the previously invalid blocks/transactions (or the other way around), and requires all nodes/users to upgrade to the latest version of the protocol software. Essentially, it’s a very efficient way to upgrade the network and make it more secure.
For Ethereum, it won’t be the first hard fork: the network has gone through 5 of them including the well-known DAO hard fork resulting in the chain split and the emerging of Ethereum Classic coin.
Why is Ethereum going for a hard fork?
Metropolis is yet another phase of Ethereum’s transition from the original Proof-of-Work (PoW) to the forthcoming Proof-of-Stake (PoS) concept that is going to be finally implemented in the future Serenity network upgrade.
PoW means that generating blocks, processing transactions and producing new ETH are based solely on the computational power of the hardware used by miners. With PoS, network users can earn rewards according to their balance, not the powerful mining equipment they have. PoS is expected to improve scalability, contribute to decentralization and help reduce energy consumption. However, it’s still a long way to go.
Will the hard fork result in the chain split? Will I receive new coins after Byzantium/Constantinople?
Not all hard forks result in splitting the blockchain and creating yet another currency. If that would have been the case, we’d have 5 different Ethereum-based coins by now. So far, there are only two of them, Ethereum and Ethereum Classic, and it is very unlikely that number will increase any time soon.
The reason ETC was born was more of an ideological nature than of a technological issue. With Metropolis, there’s no disagreement within the community; there’s practically no chance a significant part of Ethereum users will decide to stick to the old blockchain protocol, so no new coin is expected to appear as a result.
What benefits will the hard fork bring?
Byzantium will introduce 9 out of the 11 Ethereum Improvement Proposals (EIPs) that Metropolis brings. The other two, EIP 86 and EIP 96, are expected to appear in Constantinople.
Major benefits of Byzantium include the following:
– Privacy increased with zk-SNARKS (Zero Knowledge Proofs)
That’s basically the privacy feature of ZCash applied to Ethereum. The recipient will be able to validate a transaction without revealing any crucial information about the contents of it. Transactions with zk-SNARKs will demand more gas than the regular ones; however, when privacy is at stake, many will be willing to pay extra for it.
– Smart contracts made safer
With a new feature, static contract calls, a smart contract will be able to call another contract without allowing the latter to change the state of it or to become a priority. It will significantly reduce security risks that once resulted in the infamous DAO hack.
– Mining rewards cut down
Currently, the block reward is 5 ETH, which will be reduced to 3 ETH after the hard fork. That’s the first step in the process of moving from Proof-of-Work to Proof-of-Stake.
– The difficulty bomb postponed
At the same time, the transition to Proof-of-Stake won’t be instant, so miners will have time to adapt. The difficulty bomb (or the Ice Age) is the mechanism that makes mining ETH harder with the lapse of time. It will be postponed for another 18 months and will most likely be implemented during another hard fork.
Do I have to do anything before or during the hard fork?
To begin with, you don’t need to do anything, such as upgrade your wallet app, enable extra authentication, etc. All the updates will be done on Ethereum’s end and backed by our developers. That’s why if you receive a message from someone claiming to represent Freewallet with a link to claim your new coins, update your app or anything of the kind, please ignore it. There are a lot of scammers who prey on cryptoholders, and hard forks are the high times for their attacks.
The coming Byzantium hard fork as well as Metropolis upgrade altogether will start the transition from PoW to PoS, which is supposed to make the Ethereum network less dependent on miners and more welcoming to investors and regular users. Freewallet will be on the lookout for the updates to share with our users, as always.
For additional information please contact Freewallet team at firstname.lastname@example.org.
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