Ethereum Constantinople hard fork is one of the most important recent crypto-related this week. A hard fork of Ethereum is scheduled on block 7,080,000, which most likely will be mined between January 15 and January 19.
As a common practice, all ETH payments will be suspended temporarily. The most common practice is to do it 12 hours ahead of the most likely time of the fork, and resume just after the fork is completed.
Apart from the short time when the ETH payments will be suspended, everyday currency users don’t have to worry about anything. The migration from the old to the new chain will be performed automatically by most of the service providers (such as SimpleFX).
Of course, there are possible issues with the hard fork, as it’s always an operation that involves risk, but it’s built into most of the cryptocurrencies.
What is a hard fork?
As any other software blockchain-based currencies are upgraded from time to time. When a backward incompatible update happens (the new version will no longer work with the new one), it's called a "hard fork."
The “fork” is a metaphor for the crossroads each cryptocurrency goes through when branching out. Ethereum holders can decide whether they want to go on with the old rules or with the updated software.
Sometimes it happens that after a fork both currencies stay on the market. This happened on August 1, 2017, when Bitcoin (BTC) branched out, and Bitcoin Cash (BCH) was created. In the case of the Ethereum network, a notable hard fork happened after the DAO attack in summer 2016.
DAO (decentralized autonomous organization) was a form of crowdfunded venture capital fund working on the Ethereum blockchain. In June 2016 a group of users exploited the DAO code vulnerability and transferred one-third of the funds to a subsidiary account. The Ethereum community decided to perform a hard fork to retrieve the stolen money. Not everyone agreed, and amidst controversy two currencies were created via a hard fork: Ethereum (ETH) and Ethereum Classic (ETC).
What is Constantinople about?
Unlike the 2016 hard fork, the Constantinople is not as controversial. The community has agreed to introduce five Ethereum improvement proposals - EIPs (Ethereum Improvement Proposals).
- EIP 145 - more efficient information processing as native bitwise shifting instructions are introduced, which are more efficient processing wise on the host and are cheaper to use by a contract.
- EIP 1014: better scaling network processing solutions such as off-chain transactions. The improvement:
"...allows interactions to (actually or counterfactually in channels) be made with addresses that do not exist on-chain yet but can be relied on to only possibly eventually contain code that has been created by a particular piece of init code. Important for state-channel use cases that involve counterfactual interactions with contracts".
- EIP 1052 - better contract processing;
“Many contracts need to perform checks on a contract's bytecode, but do not necessarily need the bytecode itself. For instance, a contract may want to check if another contract's bytecode is one of a set of permitted implementations, or it may perform analyses on code and whitelist any contract with matching bytecode if the analysis passes”.
- EIP 1234 - 12-month delay of difficulty bomb; reduce mining rewards from 3 ETH to 2 ETH per block;
“The Casper development and switch to proof-of-stake is delayed, the Ethash proof-of-work should be feasible for miners and allow sealing new blocks every 15 seconds on average for another 12 months. With the delay of the ice age, there is a desire to not suddenly also increase miner rewards. The difficulty bomb has been known about for a long time, and now it's going to stop from happening. To maintain the stability of the system, a block reward reduction that offsets the ice age delay would leave the system in the same general state as before. Reducing the reward also decreases the likelihood of a miner driven chain split as Ethereum approaches proof-of-stake."
- EIP 1283 - introduces improved ways of monetizing data storage monetization
“This EIP proposes a way for gas metering on SSTORE (as an alternative for EIP-1087 and EIP-1153), using information that is more universally available to most implementations, and require as little change in implementation structures as possible.”
How will it influence the ETH end-user?
As the time needed for the confirmation of each block will probably remain the same, that is approximately 15 seconds. We don't know how the changes will affect the cost of a transaction on Ethereum - the "gas costs." The introduced changes to smart contracts processing should, however, lead to a decrease
The Constantinople update will require all the exchanges and wallets to update their nodes. While the Ethereum holder won't have to do anything to adjust to the changes, the ETH payments across the globe will be suspended for a short time. It shouldn't take long. However, everybody should get ready for some possible delays.