Oh Delay! What Constantinople Hard Fork Misfire Means for Ethereum
New year, new problems for Ethereum.
Down 90% in 2018, the cryptocurrency was poised to get back on track this Wednesday, putting its marker down for 2019 and the road to Serenity (AKA Ethereum 2.0). Much anticipated and delayed hard fork Constantinople (here’s our Need-To-Know guide), described as the “least eventful hard fork yet”, was finally strapped in for 16 January at block 7,080,000 this week.
With hours to go, the Foundation pulled the upgrade after a massive security issue was leaked that could’ve eventually lead to another disaster akin to 2016’s DAO hack.
*Update for CoolWallet S users: Don’t worry. Your funds are safe and you don’t have to worry or do anything. In fact, we’re so in control of the situation that we just got back from Australia where we shot an awesome new commercial, check it out RIGHT HERE.
Neither the hard fork nor the delay will affect the CoolWallet S, the everyday wallet for people on the go, which I really need to add is :
- The world’s first and best mobile hardware crypto wallet
- The first Bluetooth cold wallet ( since 2014, long before the bandwagon recently got so crowded after three smart guys tinkered around a bit)
- The Card with a Screen (OK i’m still the only one who calls it this)
- tamper-proof, water-proof, and even proof-of-stake-proof.
But I digress. Let’s forget the Outback for a minute and get back to the topic.
What Went Wrong: Re-Entrancy Attack Vulnerability
One of Constantinople’s updates, EIP 1283, is supposed to significantly lower Ethereum’s high transactional fees (gas).
However, third-party auditing firm ChainSecurity discovered at the eleventh hour this week that by doing this, it opens the door to a possible Re-entrancy attack that could exploit EIP 1283.
The Re-entrancy vulnerability can potentially allow a malicious party to repeat the same storage function many times without alerting the user to what’s happening, in essence “ withdrawing funds forever” according to a security expert.
What’s Next: Re-Enter the Drag On
It could take 6 weeks.
While some outlets report the new date to be as early as next week, one of Ethereum’s core developers, Afri Schoeden, estimates Constantinople’s new release date to be anything from 2–6 weeks away.
It makes sense for the developers to take their time now , after missing what appears to be such a massive security flaw.
Reaction: Industry, Public, ETH Price
Not everyone got the memo, or listened.
There are reports coming in that some miners went ahead anyways, updating to the new protocol and causing a kind of “chain split”. The impact of this is still unknown as of yet, but the fallout should hopefully be contained with new updates.
The development team has bunkered down since Wednesday after making an official announcement and scheduled a dev call for later today (Friday 18 January) in which they will discuss the vulnerability, solution to patch the issue and a possible new date for the hard fork.
Industry & Public
For once, this planned hard fork had the blessing of the vast majority of the Ethereum community as required and confidence was high.
The industry and public’s response has been rather muted following the postponement, with many bystanders used to delays by now and others applauding the fact that the development team was nimble enough to pull the brakes immediately after being made aware of the problem.
ETH’s price suffered a drop when the news broke but has now seemingly stabilized around 120USD.
It seems that most stakeholders are just happy that everybody is still in agreement, that the hard fork will inevitably go through eventually, and that till then, it’s just a waiting game.
Of course, this is all dependent on how long it’s going to take.
But it will all hopefully be worth it, when Ethereum reaches the promised land of Serenity and Ethereum 2.0 (learn more here).
Why Constantinople Is So Important
The Constantinople hard fork (network upgrade) was supposed to be implemented this Wednesday 16 January 2019, at block 7080,000, after several demoralizing delays in 2018.
The crucial upgrade is essential to restore confidence and smooth Ethereum’s planned transition from Proof of Work (PoW) to Proof of Stake (PoS) network, in its fourth and final roadmap stage, Serenity.
Constantinople comes packed with 5 very important Ethereum Improvement Protocols (EIP’s) which are set to make a radical improvement and much-needed changes to Ethereum, and has the blessing and support of the vast majority of the community, including miners, developers and key decision makers (except EIP 1283 currently, which is responsible for the delay).
Chief among these are EIP1234 that will delay the controversial “difficulty bomb” by about 12 months and lower block rewards from 3ETH to 2ETH.
The Ethereum Roadmap
With its inception in 2015, Ethereum’s team earmarked four different stages in its first developmental roadmap: Homestead, Frontier, Metropolis and Serenity.
The first 3 stages relied on a Proof of Work (PoW)system to operate, where miners use powerful computers to solve highly complex mathematical problems, in order to run the network and validate transactions. As reward, miners collect Ether blocks and transactional fees.
PoW systems eventually become incredibly expensive, bloated and energy-wasteful as they mature. Bitcoin mining for example consumes the same energy as a country like Ireland.
Constantinople is the second upgrade (after Byzantium) to smooth Ethereum’s eventual transition from Proof of Work (PoW) to Proof of Stake (PoS) network, also known as Serenity.
Serenity- Ethereum 2.0 and Proof of Stake
Serenity, now also known as Ethereum 2.0, will employ Proof of Stake protocol, a radical departure from the cryptocurrency’s current structure that rewards users based on the number of coins they “stake” on the network in order to help keep it stable.
It’s faster and better because it’s a lot more environmentally-friendly and supply can be limited (great since there are currently already over 100 million Ether in circulation and supply is theoretically uncapped.)
Till next week!
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