In a previous post we discussed the Ethereum Roadmap for the coming year. One of the key milestones on the roadmap update was the Constantinople hard fork. Constantinople was initially scheduled for 2018. However, due to inevitable software development delays, Constantinople was pushed to early 2019. That being said, the wait has definitely been worth it.
Constantinople has been much awaited by the community primarily because of the Block Reward reduction. The Block Reward reduction effectively reduces the inflation rate of Ethereum. I explain how in a simply post here: Ethereum Inflation Rate & Difficulty Bomb However, aside from the Block Reward reduction, there are few other exciting improvement updates in Constantinople which is scheduled for Jan 16th 2019.
In this post I will explain these updates simply and briefly! 🙂
Ethereum Constantinople: What Is It?
So what exactly is Constantinople? Is it a Hard fork? If so, will you be getting two coins? (like all the other hard fork fiascos?) Yes, Constantinople is a Hard fork - but you won’t be getting two coins. Unlike the other fiascos, this isn’t a “contentious” fork. To understand this, let’s go over a couple of terms quickly & simply:
What is a “Hard Fork”?
A “fork” is simply when the blockchain undergoes a software update. The fork may require all participants (primarily nodes & miners) to update their software to be part of the same network. This is because the software update is not compatible with the older version. This is called a “hard fork”
What is a “Contentious Fork”?
A contentious fork is when participants do not agree with software updates. In this case, they may choose to either stay with the old software or implement their own updates. Essentially, they choose to go their own way because they don’t agree with the direction of the core team (yay, democracy!) This causes a “fork” in the original chain, and two new chains will begin to exist independent of each other.
Constantinople: Not A Contentious Fork
Fortunately, Constantinople is not a contentious fork. Everyone (for the most part) is on the same page with the proposed software updates on the Ethereum Blockchain. So what are the updates? In the next section I will provide a simple overview of the Ethereum Constantinople 2019 Hard fork!
Constantinople: A Quick Overview
The Ethereum Constantinople 2019 hard fork marks an important milestone in Ethereum’s transition from Proof of Work to Proof Of Stake (Casper).
As mentioned in the previous section, the Constantinople hard fork is simply a software update. The software update will have improvements that have been accepted by the community. These improvements were proposed ahead of time and are simply called “Ethereum Improvement Proposals” (EIP). There are five of these Ethereum Improvement Proposals that will be included in the Constantinople Update for Jan 16th 2019.
Block Reward Reduction ← A BIG ONE!
Cheaper Smart Contract Execution
Increased Efficiency on Verification of External Smart Contracts
Storage Cost Improvements
[EIP 1234] Block Reward Reduction: “The Thirdening”
This is the big one that everyone was waiting for all of 2018. The update falls under the EIP1234 proposal and will have two major changes:
- Block Reward Reduction
- Delaying The Difficulty Bomb
I explain both of these in more detail (with simple analogies) in this post, but I’ll go over them quickly here as well.
Block Reward Reduction: Constantinople will officially mark the reduction of the rewards issued to miners from 3 ether to 2 ether. This effectively reduces miner rewards by ⅓ and is often referred to as “The Thirdening“. This reduction in Block Rewards will significantly reduce the inflation rate of Ethereum.
Ethereum Inflation Rate Definition (Quick'n'Dirty)
The speed at which each Ether loses it's purchasing power/value.
Difficulty Bomb: Miners are issued rewards each time they successfully add a new block onto the chain. The Difficulty Bomb is a tool within the EVM that the developers can use to adjust how difficult it is for the miners to do this. If the bomb “detonates”, it will get exponentially harder everyday for miners to find blocks. This was put in place to incentivise miners to transition from the Proof Of Work Chain to the Proof Of Stake Chain.
So why delay? Well, two reasons:
Ethereum is not moving to Casper just yet - so there’s no reason to incentivise the miners to stop mining here just yet.
The inflation rate has already been reduced by decreasing the issuance rate.
[EIP145] Cheaper Smart Contract Execution:
Constantinople will include the EIP145 proposal which will introduce “Shifting operators” to the Ethereum Virtual Machine. Put simply, this will allow Smart Contracts to initiate certain instructions for only 3 GAS compared to the 35 GAS it would have costed without the Shifting Operators.
This is a drastic reduction in the cost of these operations and contributes to Ethereum’s efficiency improvements.
[EIP1052] Increased Efficiency on Verification of External Smart Contracts
This is another key efficiency improvement in the 2019 Constantinople update. Smart Contracts often need to perform verification checks on other Smart Contracts. Currently this is done by copying the bytecode of the external Smart Contract and then performing the needed verification. However, this can unnecessarily expensive when dealing with large Smart Contracts. EIP 1052 tackles this problem by introducing a new function that will allow the Smart Contract to pull a hash of the bytecode instead. This will make verifications far more efficient.
[EIP1014] State Channels!
The Ethereum Constantinople 2019 Update will also include a keystone update for State Channels in Ethereum. EIP 1014 will allow interactions be made with addresses on the main chain that don’t exist yet . This may sound confusing but is a key milestone for the implementation of State Channels. The goal of State Channels is to have as little load on the main chain as possible while still remaining secure. Unnecessary calculations and processes will take place off chain – thereby increasing the efficiency of the main Ethereum chain.
[EIP1283] Cheaper Cost Of Storage
Constantinople will also include an update that will reduce the storage costs in Ethereum. EIP 1283 proposes a change to how gas is charged for EVM storage operations. The primary initiative of this proposal is to reduce excessive gas costs where unwarranted. And to enable new use-cases for contract storage.
With this, transactions that are making multiple updates to the same storage slot will cost significantly less!
Ethereum Constantinople Update 2019: Conclusion
Ethereum’s soon approaching Constantinople hard fork, while significant, is still only a piece of the larger puzzle that is Serenity – Ethereum’s transition to Proof of Stake.
While Constantinople brings about a reduction in miner block rewards (EIP 1234), it must be noted that the hard fork is not a Contentious Fork. All 5 EIPs within Constantinople gained majority approval across the Ethereum community as a whole, thus will not result in two coins after the hard fork on January 16, 2019.
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