A long-awaited Ethereum hard fork called Constantinople has been delayed due to security concerns.
Before we get into the concerns causing the delay of the Constantinople fork, let’s explore what the hard fork entails.
Many crypto investors have only experienced contentious hard forks, such as the August 2017 Bitcoin to Bitcoin Cash hard fork. However, many other hard forks are supported by the community and cause no issues or drama on the network. In fact, hard forking is a critical part of software development.
A fork occurs when there is a split in opinion on the state of a blockchain. There are two ways to proceed once a branch or split in perspective occurs: a soft fork, or a hard fork. A soft fork is a software upgrade that is backward compatible. An easy way to think of this is to compare two versions of a software program you might use, such as Microsoft Word. With a backward compatible upgrade, you can still open and use documents created in the Microsoft 2019 version on Microsoft 2010.
However, with a hard fork the software is not backward compatible. Blockgeeks describes this well:
[A hard fork is similar to different operating systems]. Think PlayStation 3 and PlayStation 4. You can’t play PS3 games on PS4 and you can’t play PS4 games on PS3.
The Constantinople upgrade is a hard fork. One important thing to remember is that forks happen all the time. All software and systems need to update. Only when the community doesn’t agree on the update moving forward do issues happen, such as with the Bitcoin and Bitcoin Cash contentious hard fork. The Ethereum community is supportive of the upcoming hard fork, mainly because it has been part of the Ethereum development plan all along.
With the upcoming Constantinople hard fork, everyone will continue using the ETH tokens they already have in their wallets. This makes this hard fork different than Bitcoin vs. Bitcoin Cash where a totally new (and separate) currency was created.
Four Stages of Ethereum Development
When Vitalik Buterin created Ethereum, he laid out a four stage road map to its development. Vitalik released the Ethereum white paper at age 19. Since inception, Vitalik has been clear that Ethereum was never developed to be a currency. Instead, Ethereum is meant to be a platform for decentralized applications, also known as dApps. We saw many of these dApps attempt to launch on the Ethereum network as ICOs in 2017-2018.
Before Ethereum can be a fully robust platform to support dApps, it must go through different growth and development stages. In each stage, Ethereum improves by folding in Ethereum improvement proposals (EIPs), designed to help the system. The four stages of Ethereum development are:
The entire development of the Ethereum protocol has been to move from a Proof of Work algorithm to a Proof of Stake algorithm. More on that below.
We are currently in the Metropolis phase of Ethereum development. Because there is so much expected development in Metropolis, there are two sub-classes: Byzantium and Constantinople. The Byzantium upgrade happened successfully in October 2017.
The second phase of Metropolis, the Constantinople hard fork, was originally planned for November 2018.
After failing to meet consensus among developers, Constantinople was delayed until December 2018 and then again to January 2019. After discovering a security bug on January 15, Constantinople has been delayed again.
This hard fork has been in the making for a long time. According to Ethereum developers, the software upgrades aim to make the Ethereum network faster, more efficient, and less expensive.
Byzantium to Constantinople
The upgrade from Byzantium to Constantinople is a major one in Ethereum development. Mining block rewards will reduce from 3 ETH to 2 ETH. Additionally, the upgrade intends to speed up processing times, and improve data storage. This will help to address the scalability issue plaguing so many crypto networks.
Additionally, five EIPs will be implemented with the purpose to ease the transition from the Proof of Work algorithm to a Proof of Stake algorithm. This is a major leap in crypto technology as Ethereum will be the first major network to support Proof of Stake. Before we dive into why this is such a big deal, let’s have a refresher on Proof of Work vs. Proof of Stake.
Proof of Work
In the Bitcoin blockchain, double spending is avoided by a concept call Proof-of-Work. Proof of Work was defined in 1993 by Cynthia Dwork, a Harvard computer scientist. Proof of work (PoW) was not a new concept when presented in the Bitcoin white paper. However, the way Bitcoin creator Satoshi Nakamoto wove PoW and other cryptographic signatures into his distributed ledger was a truly new innovation.
Proof of Work requires miners running “nodes” (computers) to solve complex and expensive mathematical calculations in order to facilitate a transaction on the blockchain. The first miner to solve the complex mathematical equation receives a reward in the form of transaction fees and newly mined cryptocurrencies. Proof of Work allows for trustless and distributed consensus. The system is trustless because it doesn’t require third-party intermediaries (such as central banks or credit card companies) and distributed because thousands of miners run nodes on a network across the world.
Proof of Stake
Proof of Stake is a different way to validate transactions on the blockchain. With Proof of Stake, the mining power is based on a percentage of coins held by a miner. This means Proof of Stake aims to be more energy efficient. Instead of the mining computer using energy to try and solve a block as with Proof of Work, the Proof of Stake miner gets access to a percentage of transactions based on his ownership stake.
As an example, a miner who owns 5% of the available Ethereum supply could theoretically only mine 5% of the blocks.
The proof of stake concept aims to be more energy efficient and also rewards miners differently. With PoW, the miner receives a block reward for solving the block. With Proof of Stake (PoS), there is no block reward so the miner receives the transaction fees.
Security Concerns Delay Constantinople
The Constantinople hard fork was originally scheduled to happen at the 7,080,000 block on the Ethereum network, sometime between January 14-18th, 2019. Martin Swende, the security manager for Ethereum Foundation stated the new version will contain a kind of “emergency switch” that will postpone the upgrade if something goes wrong or if the its release fails.
The emergency switch was flipped on January 15th after ChainSecurity, a crypto audit firm, discovered a “reentrancy vulnerability”. This vulnerability could allow a potential attacker to steal ETH from the network through smart contracts. An attacker could “repeatedly request funds while inputting false data about the actual ETH balance.” (Source)
Major cryptocurrency exchanges like Coinbase, Kraken, Binance and Huobi have expressed support for the Constantinople hard fork. Though the fork is not contentious, Ethereum price took a tumble after news came out the hard fork would be delayed yet again.
As of publishing, no new fork date for Constantinople has been announced.