The Constantinople upgrade, which had previously been scheduled for January 17, has been postponed to the end of February. According to a tweet sent out by Ethereum team leader Peter Szilagyi, the update will go live on February 27, 2019. While the initial update was expected to roll out in November 2018, it was pushed back when an upgrade protocol was discovered to be defective. This upgrade was created to ease the transition of Ethereum from the current PoW (Proof-of-Work) to the PoS (Proof-of-Stake) consensus algorithm. However, it is important to keep in mind that the Constantinople upgrade itself is not the PoS update.
Constantinople upgrade delay
Recent delays to the update were warranted when a smart contract firm, ChainSecurity, released a report that investigated some Ethereum’s planned upgrades. According to the firm’s report, Ethereum Improvement Proposal (EIP) 1283, if reported, could create a loophole in Ethereum’s network that hackers can exploit and use to steal user funds. The attack, dubbed the “re-entrancy attack,” could provide hackers the ability to enter into particular functions on Ethereum more than once, allowing a hacker to siphon funds from the network without ever triggering any double-spending alarms.
When Ethereum network developers received the news, they decided to abort the planned upgrade. In the meantime, the developers are looking for a solution. On January 18th, a developer’s call was scheduled with notable participants such as Vitalik Buterin, Nick Johnson, Hudson Jameson, and others in attendance. They all decided to cancel the roll-out of the Constantinople hard-fork. All those who had upgraded to the update were urged to upgrade again and remove the Constantinople due to the security bug found in EIP 1283.
Notable Constantinople changes
Constantinople is an essential step in Ethereum’s move towards the Proof-of-Stake consensus algorithm. The new PoS model will affect Ethereum’s PoW mining model through the introduction of the “difficulty bomb.” Ethereum developers decided to delay the difficulty bomb for at least another year. Until then, Ethereum will remain mineable even with ASICs. The difficulty bomb’s job is to deter miners from continuing with PoW after Ethereum makes the shift to PoS. Afterward, mining will continue, but with smaller rewards. This is to support PoS not requiring mining for maintaining blockchain integrity.
Why PoS is a step in the right direction
PoS is resourceful: The undeniable reason for this is the fact that PoW uses massive amounts of computing power – PoW comes with high energy costs and hardware deterioration. However, in the PoS model, users have to simply freeze their crypto holdings. As a result, PoS uses a fraction of the electricity that is needed for PoW.
True decentralization: With the PoW model, there is the risk of a 51% attack on the network if mining power is centralized which, given how much computing power is held by large Chinese miners, is not impossible. The new PoS model would minimize the chances of such a risk happening. Stakers would be randomly chosen to keep the integrity of the blockchain, meaning most people would opt to stake their coins. This move would help promote decentralization across the Ethereum network.
Controls volatility: In the PoW model, miners keep the blockchain in check, which in turn enables them to earn tokens for solving the cryptographic hashing calculations that are used to confirm transactions. Keeping or selling the earnings of their mining is in the sole discretion of the miner. Since mining in PoW is costly, most sellers opt to sell their coins. However, if there is no demand for the coin, prices remain low. However, with the PoS model, holders of tokens are incentivized to hold rather than to sell. The fact that they can make more coins using the same coins makes them think twice about selling.
The search for an effective consensus algorithm is still an on-going process. However, the PoS model is a promising new way of doing things with higher efficiency, reduced costs, and better scalability. These are the needs of the day, and more price stability and decentralization will go a long way in helping cryptos gain wider adoption and acceptance in traditional markets – and that end will justify the means.