Ethereum Classic Hard Forks; Diffuses ‘Difficulty Bomb’

If the split between Ethereum and Ethereum Classic wasn't definitive yet, it is now.

Ethereum Classic, the project born out of rejection of Ethereum's reversal of The DAO , just hard forked. With that, Ethereum Classic implemented the biggest protocol change yet, and has furtherdifferentiated itself from the Ethereum project.

Most importantly, the hard fork - dubbed "Die Hard" - diffused the difficulty bomb, which was set to freeze the protocol later this year. Additionally, Ethereum Classic implemented replay protection, to ensure Ethereum transactions are no longer valid on the Ethereum Classic chain and vice versa. It also adjusted technical parameters to increase the cost of certain spam attacks.

"This protocol upgrade demonstrated growing maturity of Ethereum Classic, as it's starting to blaze its own path not only in terms of ideology, but also technical choices," Ethereum Classic's project coordinator, "Arvicco" told Bitcoin Magazine . "Such as a commitment to staying on proof-of-work consensus for a prolonged period."

The Difficulty Bomb

The original Ethereum protocol, as implemented by the Ethereum Foundation , included a so-called "difficulty bomb." Baked into the software, Ethereum's mining difficulty is programmed to increase exponentially over time. This has been unnoticeable up till now, but by around April or May of this year, it is set to increase so rapidly that mining will necessarily become unprofitable. As a result, no more blocks will be found at all, and the protocol will effectively freeze, creating an "Ice Age."

The Ethereum Foundation implemented this difficulty bomb to force its own hand - and that of the broader Ethereum community. As outlined in its release documents , the Ethereum Foundation planned to roll out the Ethereum project in several stages, each one requiring a hard fork. The difficulty bomb was implemented to ensure that developers and the community would have to switch to a new protocol this year; eventually working toward a proof-of-stake mining algorithm known as "Casper."

As a continuation of the original Ethereum protocol, Ethereum Classic also included that difficulty bomb. The Ethereum Classic community, however, has decided it will not follow the Ethereum Foundation road map, most notably regarding Casper. As such, there is little need for Ethereum Classic to keep the difficulty bomb, and it was removed with the Die Hard hard fork.

This gives the project more time to work on further protocol development, Arvicco said.

"Now that the most critical technical issues such as difficulty bomb and replay protection are resolved, ETC dev team will start focusing more on longer-term changes, such as monetary policy and improved platform stability and security."

The Split

With every hard fork, there exists a risk of not everyone switching to the new protocol, in effect creating two different networks and currencies. This is how the Ethereum Classic project itself started, of course, and could happen again.

So far, however, Die Hard seems to have gone through with few holdouts. While it is too early to tell with full certainty whether the ecosystem has fully switched to the new protocol, there didn't appear to be much opposition beforehand. A vast majority of hash power has also made the switch - though at time of writing a small number of miners hadn't yet.

"Even though we campaigned for two weeks for everyone to upgrade, about 0.5 percent of hash power kept mining on the old chain for a while," Arvicco said. "That was to be expected, though; with our last fork in October that was about 3 to 5 percent. So, there is progress."

And the odds of these holdouts bootstrapping their own currency seems unlikely, Arvicco believes.

"Not unless there is a community ready to support it both in terms of participation and real money. And the prospects of such community is not good with the bomb blowing up pretty soon."

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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