The upcoming transition for Ethereum hints at ramifications

On the already complicated transition that the Ethereum blockchain should be executed soon, a key will now be added.

As early as September, Ethereum is set to undergo a major software upgrade dubbed Merge, in which the network will shift from using the dozens of computers commonly known as miners to more power-efficient validators to order transactions. Not everyone agrees with the change. A growing number of factions are developing fork plans that will copy current software and, with some tweaks, they will essentially continue to work with the older version of Ethereum using miners.

One of the efforts, called EthereumPOW, is led by Hongcai “Chandler” Guo, who was once a big Ethereum miner in China but is now semi-retired and lives near San Francisco. Several Chinese companies that make Ethereum mining equipment — which will be rendered nearly obsolete by the Fusion — have asked him to kick off the hard fork effort, he said.

“Everyone will get free money” when current Ethereum holders receive new tokens if the blockchain forks, Guo said in an interview. “Everyone will be happy.”

Forks have been a mainstay of the cryptocurrency world almost since Bitcoin’s debut over a decade ago, as factions battled for direction and control of various blockchains. Bitcoin Cash, Bitcoin Gold and Bitcoin SV have all been created with varying degrees of success. There is already Ethereum Classic, which was spun off from Ethereum in 2016.

Analysts see many obstacles. Newly forked channels often lack support from app developers, developers, and users, and in many cases don’t even have analytics tools to track their usage or lack thereof.

“Most discussions around an Ethereum PoW hard fork have been relatively short,” focused on a new token, said Aidan Mott, director of intelligence at researcher Messari. “However, significant planning and research to support the ongoing logistics of a new network have been very light.”

At the Bidl Asia 2022 conference in Seoul, South Korea this week, Ethereum co-founder Vitalik Buterin dismissed forking efforts as of little value, saying they hardly differentiate themselves. existing blockchains.

“I don’t expect Ethereum to be really hurt by another hard fork”Buterin said during a webinar on Saturday. “Overall, my impression of almost everyone I talk to in the Ethereum ecosystem has been fully supportive of the proof-of-stake effort and the ecosystem has been pretty united around it.”

Still, Guo said he has a team of 60 developers working on a fork, which would require tweaks to existing software to get rid of the ominous difficulty bomb, a software feature designed to force the transition to the new system based on a validator called proof. -of-stake (PoS) from the current proof-of-work (PoW).

The way to proceed seems disputed. Hedge fund Galois Capital predicted a range, although Guo said they did not communicate. Crypto entrepreneur Justin Sun’s Poloniex exchange will support all forked proof-of-work Ethereum tokens, Sun said in a message to Bloomberg. Sun has created its own blockchain, Tron, which already uses proof-of-stake.

“Proof of work is essential for Ethereum” because it is very reliable, Sun said. “For the smart PoS platform, we have Tron.”

It’s not that something should or shouldn’t exist, but that it can. Normally, in cryptocurrencies, whatever can happen will happen.

Miners may end up supporting a pitchfork as a way forward. After the merger, they face the possibility of migrating to smaller chains like Ethereum Classic, repurposing equipment, or even selling their machines. Hive Blockchain Technologies Ltd. said on Friday that it would consider switching to Ethereum Classic mining.

“We generally support anything that pays us well, that we can support,” said Chris Kyle of Flexpool, which helps many small miners support Ethereum. While he notes he hasn’t seen any solid proposals yet, that doesn’t mean a fork won’t happen, he said.

“One thing I will point out is that crypto tends to be quite illogical,” Kyle said. “Many networks/coins have little real value, it’s just speculation. So a successful fork would probably need someone/something famous behind it, if they get that…then that’s possible.”

Many businesses are likely to take a wait-and-see approach. In 2016, Taylor Monahan, now global product manager for the MetaMask crypto wallet, was spearheading work on MyEtherWallet, which initially said it would not support the Ethereum Classic hard fork. The company quickly changed its mind.

“With all the things that happened to us back then, I would never say that today,” Monahan said, adding that MetaMask should weigh whether to support another forked token. “If there’s an opportunity for someone somewhere to make a lot of money, it’s probably going to happen.”

Learn more at Bloomberg.com

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