Ethereum is undergoing an upgrade this week that will see the open-source public blockchain significantly change how the platform works, as well as how miners are compensated.
Created in 2015 Ethereum is a distributed computing platform and operating systems that facilitates blockchain 2.0 applications such as smart contracts and certificate authentication.
Currently miners who are doing the distributed computational work to run the platform are paid three tokens or cryptocurrency coins called Ether, which are roughly valued at £100. The new incarnation or fork of the Ethereum blockchain will only reward the miners with two Ether coins.
Essentially the platform is going through a network upgrade that they have called Constantinople. Due to the decentralised nature of blockchain platforms network upgrades require consensus and cooperation from developers and the user community.
The changes to the underlying protocol of the platform are inserted into a specific point in the ledger which creates two paths or forks, the old chain and a new chain which the community has all agreed to follow.
A key upgrade is the reduction in the cost of Gas used in transactions. Gas is the name of special units used on the platform to regulate how much work is required by computers to complete a transaction. Any operation that takes place within smart contracts or currency transactions on the platform costs Gas. Gas is important as it ensures that the network isn’t slowed down by intensive unnecessary work that has no value, gas assigns value to actions on the platform.
The protocol upgrades will also make it easier and cheaper to do transactions on the network through Ethereum virtual machines and will reduce latency in transactions.
Ethereum Upgrade Creates Fears of Split
There were fears that the platform could experience a split if everyone didn’t stop using the old chain which would result in two chains running that produced Ether coins.
Bitcoin set a precedent for this in 2017 when developers on the popular cryptocurrency could not agree on an official path resulting in a hard fork on the platform and a new rival cryptocurrency called Bitcoin Cash was created.
However, Ethereum developers and users are in a solid consensus on the direction of the platform. In fact the Constantinople upgrade was scheduled for the 16 of January, but due to the discovery of vulnerability within the update by Chainsecurity the update was postponed.
Ethereum foundation member Hudson Jameson informed the community that: “Out of an abundance of caution, key stakeholders around the Ethereum community have determined that the best course of action will be to delay the planned Constantinople fork that would have occurred at block 7,080,000 on January 16, 2019.”
The upgrade will result in fewer Ether coins being awarded and thus the supply of the platforms currency would affected, but as of the time of writing fears that this would have a detrimental impact on Ether’s value have so far not materialised.