Get Ready for the Ethereum Byzantium Hard Fork
The hardfork on the Ethereum network called Byzantium has now officially been set. It will occur at block number 4.37m which is likely to be at between 12:00 and 13:00 UTC on Monday the 16th of October. This is on the back of a successful hardfork on the Ropsten test network on the 19th of September.
Byzantium is one of the first few of upgrades that form part of a series which are called the Metropolis upgrade. Byzantium is the implementation of 9 of the Ethereum Improvement Protocols (EIP) first outlined in the Metropolis roadmap.
Hardforks are updates to a blockchain that, despite being controversial, are quite necessary. This would be the fifth hardfork of Ethereum with mixed results in the previous four prior to it. Only one of these hardforks resulted in the creation of a new cryptocurrency which was Ethereum classic.
These changes are meant to improve the speed of the network, make it more secure and introduce new privacy initiatives such as zk-snarks. There is still quite a bit of work to be done around the hard fork to make sure that it goes off without a hitch.
As the Byzantium upgrade is a hardfork, there will be a requirement that all of the network nodes upgrade their software. Hence, it is incumbent on many of the startups who provide clients for the Ethereum blockchain to update their software to make sure that it does indeed contain the Byzantium code.
For a completely consistent upgrade across the network, all of the Ethereum clients will need to update their software before block 4.37m. This is because of the fact that the EIPs are coded in the clients and will correspond to the block number. If any of the nodes do not upgrade, they will be left behind and the chain should split.
It is important to point out that this upgrade will only be applicable to those people who are running full network nodes on the network. If you are using something like an online wallet such as Jaxx or MyEtherwaller, then the upgrade does not apply to you. These third party services will have to ensure that their software is fully updated by the fork.
Currently, the two biggest Ethereum client developers have released the updates to their software. Geth updated its software last week and Parity released an update yesterday. However, Parity had to pull the update and fix a bug that was discovered in a fuzz test.
Impact on Miners
As many may know, one of the most important upgrades that has been planned for the Metropolis upgrade is the move from Proof-of-Work (POW) to Proof-of-Stake (POS) mining. For Ethereum, the latter is part of their focus on the Casper POS Ghost protocol.
This, however, is not part of the EIPs that are included in the Byzantium upgrade. Something else that will impact the miners is that the mining difficulty will be lowered. Lower difficulty will mean faster transaction times and hence higher speeds. The transactions will also be cheaper as block rewards for the miners will be reduced by about 2 ETH.
Although the majority of participants have welcomed this, there have been some rebels who have threatened to mine the pre-fork chain.
What About Exchanges
If the hardfork is carried off with no major hitches, then no action from the exchanges is required.
If, however, there is a hardfork and the result is that some remain on legacy chain and others move to the Byzantium, you will have two competing coins. This is exactly what happened when Ethereum split from the original chain on Ethereum classic.
There are a few dissenting voices who may choose not to go ahead with all of the protocol changes in Byzantium. For example, there are a subset of users who would like to fork and implement the Byzantium upgrade but keep the block reward as is.
If this group is able to succeed in producing a currency that is able to effectively challenge the post-fork Ethereum then the exchanges could be forced to include the coin on the exchanges. However, currently there is no indication that this is likely.
More to Come
As mentioned, the Byzantium upgrade is only one of many upgrades that form part of the Ethereum Metropolis roadmap. If this hardfork goes off without a hitch then it is indeed likely that many users will look forward to the next slew of updates.
Moreover, as we have seen with the contentious Bitcoin hardfork debate, the relative ease with which the Ethereum community was able to agree to the Byzantium upgrade is a further vote of confidence in the cryptocurrency.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.