Constantinople, the third hard fork is part of the roadmap for Ethereum upgrade. Below we will tell you about the key features of Constantinople hard fork and explain what it is and what issues it will resolve.
As of today, the hardfork is postponed and the launch date is not yet announced. The reason is a critical vulnerability found in one of EIP-1283 upgrades. Known as «reentrancy attack», it would have allowed hackers to steal funds from users
What is Constantinoplе hard fork?
Hard fork will be activated on block 7 080 000 between 14 and 18 January.
First of all, Constantinople hard fork implementation is a kind of the Rubicon in Ethereum’s transition to the Proof-of-Stake consensus algorithm. Constantinople is the second part of a major Ethereum upgrade called Metropolis.
Metropolis is a major hard fork in the Ethereum network, designed to address many of its issues. It is to be implemented in two 2 stages: Byzantium and Constantinople. Byzantium, held in October 2017 led to a reduction of miners’ rewards to 3 ETH and a slower issue speed.
What will change after Constantinople hard fork?
After the hard fork launch the fees in the network will get lower. The network’s efficiency will improve due to the following upgrades:
1) EIP 210 — hash block storage will be re-arranged;
2) EIP 145 — maths operations in the Ethereum virtual machine will be performed faster. In addition, this upgrade will enable to use 10 times less gas which will eventually make smart contracts cheaper;
3) EIP 1014 — this solution will enable off-chain transactions which will ensure Ethereum’s higher scalability. This solution is similar to BTC’s Lightning Network;
4) EIP 1052 — will make smart contracts verification cheaper and more efficient.
After Constantinople, the miners’ reward will drop to 2 ETH and delay the difficulty bomb for 12 months. This will lead to a fresh issue reduction which, in turn, will result in limiting the offer that is expected to impact the price growth.
What is the difficulty bomb?
The difficulty bomb is a mechanism that makes mining more challenging and unprofitable. The algorithm was embedded by the developers in order to transition to the PoS mining algorithm. Hard forks are implemented, among other, in order to delay mining becoming more challenging.
Is Ethereum not ideal?
Though Ethereum is one of the most useful crypto projects, the coin has a number of major issues: lack of confidentiality, low scalability and Proof-of-Work algorithm.
Vitalik Buterin often mentions the so-called ‘blockchain trilemma”: any blockchain network can have only two core features of the three which are decentralisation, scalability and security. BTC and ETH have sacrificed scalability for the sake of the other two. So far, developers have failed to find a way to combine all three features in a single project.
Ethereum dramatically differs from other projects in terms of transaction speed: Ripple network processes 1,500 transactions per minute while Ethereum does a mere 25.
What drives transition to Proof-of-Stake?
There are number of issues with the Proof-of-Work consensus mechanism Ethereum network currently uses: high risk of 51% attack, increasingly expensive mining, a risk of miners’ uniting to pursue unfair practices and gaining control over the mining process.
After transition to PoS, miners’ reward will drop from 3 to 2 ETH. In addition, the new algorithm will enable to save electricity in the mining centres, halt a constant ‘arms race’ among miners and render useless 51% attack.
What is 51% attack?
It would be best to present it as a reference or a hyperlink
A 51% attack is one of cryptocurrencies’ so-called diseases. It occurs when the attacker controls the computing power exceeding that of all other network participants taken together, that is he holds a .’controlling stake’ of the computing power. In such a case miners can gain control over the entire network and generate blocks as they wish.
How can the fork affect Ethereum?
As the reward for a block will go down from 3 to 2 ETH, the total number of Ethereum coins entering the market will shrink, which may lead to a price increase.
On the other hand, a decline in mining profitability may result in miners’ transition to other coins more profitable in terms of mining.
We can say with certainty that a short-term volatility will follow a hard fork. It is noteworthy that Ethereum is currently in the middle of a critical phase that will determine whether the cryptocurrency will remain the leading application for creating decentralised applications in the near future.