Everything to Know About the Upcoming Constantinople Ethereum Hard-fork
Background Roadmap
The develoment roadmap of Ethereum, the second largest altcoin by total marketcap, has 4 distinct developmental stages.
- Frontier (July, 2015) — The beta stage of development launched in July of 2015 as the first live release of the protocol. It offered a minimal framework that it allowed developers to mine Ether, develop Daps, and experiment with the protocol using a command-line interface.
- Homestead (March, 2016) — Was the first production version release included many improvements to the protocol that paved the ways for future upgrades and sped up transactions. Mist wallet was released with this fork.
- Metropolis (October, 2017 & Jan, 2019) — A lighter, faster, and more secure Ethereum broken into two phases: Byzantium & Constantinople. Focuses on simplification of smart contracts, enhanced privacy, security enhancements, & adjustment of the difficulty bomb in preparation of for the next major developmental upgrade.
- Serenity (TBA) — The long awaited transition to proof of stake (POS) implementing the casper protocol.
Metropolis & Constantinople — When, What, & Why?
The Constantinople hard-fork is the implementation of the second phase of Metropolis and it’s set to take place when the block height on the Ethereum network reaches 7,080,000. It is estimated to take place on January 16, 2019 and brings significant improvements to the Ethereum protocol with five Ethereum Improvement Proposals (EIPs) that will not be back-wards compatible.
The 5 EIPs set to be released:
- EIP 145: Bitwise shifting instruction in EVM — Adds native functionality to protocol that makes information procession cheaper & more efficient.
- EIP 1052: EXTCODEHASH opcode — A means to optimize large scale code execution of a certain smart contracts function resulting in a significant reduction in gas fees.
- EIP 1014: Skinny CREATE2 — Allows interactions to be made with contracts that don’t exist on chain yet. Keystone for the state channel framework for implementation of off-chain transaction. *Similar to bitcoin’s lightning network.
- EIP 1283: Net gas metering for SSTORE without dirty maps — An optimization in smart contracts resulting in significant reduction of gas fees associated with data storage costs for decentralized applications.
- EIP 1234: Constantinople Difficulty Bomb Delay & Block Reward Adjustment — Reduces the block reward for miners down to 2 Eth per block instead of 3 Eth (33% reduction). Delays the “Ice Age” difficulty bomb implementation by 12 months.
These improvements will significantly optimize the code for developers bringing increased efficiency & performance to smart contracts, significant gas cost savings, and major economic changes. Constantinople enables smart contracts to interact with off-chain data and the capability to bring second-layer solutions to the network. These second-layer possible solutions include: sharding, implementation of Zk-SNARKS, & plasma.
Economic Potential Impact.
The reduction of the block reward per block to 2 Ether will likely have major implications on Ethereum’s economics moving forward.
In 2019 alone, the effect of Constantinople is estimated to lower the anticipated generation of Ether by 2,459,467. The total amount of Ether that was set to be generated currently was 7,378,402 Ether, with an anticipated inflation rate of 7.4%. After implementation it now drops to 4,918,935 Ether and an inflation rate of 4.7%. This brings the inflation rate of Ethereum significantly closer to that of Bitcoin’s which is currently 3.83% as writing.
The impact on miners could decrease profitability of mining even further in the short-term & it’s difficult to tell what will happen to the Ethereum hashrate as a result. However, this update should prove to be bullish for the medium and long-term outlook of Ethereum.
How Should I Prepare for the Fork?
In the past there was controversial hard fork that occurred in 2016 after the DAO collapse that resulted in the split of the Ethereum blockchain into two district surviving chains (Ethereum & Ethereum Classic). The largest mining pools and virtually every significant exchange however has voiced their support for the upgrade making a chain split very unlikely.
There is no need to move any Ethereum in order to be prepared for the fork. All exchanges and services (Coinbase, Kraken, ShapeShift, MyCrypto, MetaMask, Trust Wallet, etc) will be updating their nodes and won’t require any action from their users. If you however are running a node (Geth/Parity on your home computer), you will need to update your software to the newest version.
It’s advisable to avoid sending any Ethereum transactions around January 16th during the fork to prevent the risk of any issues arising. Be cautious as there is likely to be an increase in scam attempts where malicious individuals attempt to take advantage of individuals by making false claims about needing to claim new coins, etc.
Conclusion
The newest update in the Ethereum protocol, Constantinople, is paving the way for the eventual transition to Proof of Stake (POS) that is set to come with Serenity. There is significant growing competition in the protocol space from other project. These improvements are preparing the Ethereum network for the eventual implementation of the major scaling solutions that should help to ensure longevity and competitiveness in a space that is always innovating.
It’s unknown if Constantinople will ignite a rapid return to the wild speculation that took Ethereum to over $1200 a year ago. But it will surely be a major key element to Ethereum as it attempts to facilitate true real-world adoption.
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