For those of you that remember Bitcoin’s eventual fork in 2017 and the events that led up to it, it is safe to say you also remember that these events definitely involved a few phone calls between groups of influential community members.
Now, it is almost as if we have come full circle with Ethereum’s conference call, which should have already occurred by press time, today. To add to this, an almost direct connection can be drawn between the two networks and the purpose of their conference calls. In short, Ethereum is also facing very specific difficulties related to its future.
As is mentioned in Coindesk’s report that came out today on the subject, the network is trying to reach some sort of consensus on issues like whether or not to slow down what is called a difficulty bomb, as well as how to combat the inflation of Ether. On top of all of this, the network’s users and developers are also trying to decide the merits as well as disadvantages of making Ethereum, ASIC resistant.
If you are not already aware of their basic definitions, then these issues might bear a bit of explaining to provide you with the needed context for this debate. For starters, a difficulty bomb is essentially a number of lines of computer code that is designed to gradually increase the difficulty of mining on a Blockchain network.
In Ethereum’s case, this means that eventually, its native currency might become much more valuable not just because of growing utility, but also because it will be impossible to mine it, due to the increasing computing requirements. Suffice it to say for now that the major issue here is whether or not to delay Ethereum’s difficulty bomb.
As of now, it is still set to reactivate in 2019 to coincide with Ethereum’s planned shift from Proof of Work to Proof of Stake. As this shift was now been delayed, some leaders in the Ethereum community are also proposing a delay of the difficulty bomb. On the other hand, detractors of this option are pointing out that delaying the bomb means decreasing block rewards in a way that is proportional with the delay.
If this is not done, it will apparently becoming progressively easier to mine and therefore, miners will also gain progressively higher rewards that are not truly based on the work that they do.
In terms of dealing with Ethereum’s inflation, the situation may be a lot simpler to solve. Vitalik Buterin’s latest idea on the subject was apparently to cap Ether creation at 120 million coins, in order to make the cap exactly two times the original amount that was raised in 2014 to fund the network. According to him, this could impact inflation in a positive way. Even so, the key word here is “could.”
Finally, there’s ASIC resistance, as mentioned above. If the majority of the Ethereum community votes in favor of such a change, then it is possible that the Bitmains of the mining space would be blocked from ever achieving a majority of the Ethereum network’s hash rate. While this does seem to be the best decision in terms of preserving decentralization, Vitalik and others who stand behind him also make a valid point in opposition to this path.
In theory, no network can be ASIC resistant forever. The very definition of an ASIC in the context of the Blockchain industry is a computer chip that specializes in solving a specific kind of Proof of Work algorithm. Even now, some networks like Zcash, which had been planning to become ASIC resistant, have now decided to abandon these plans for the same reasons that Buterin and others have stated. It just will not last forever.
With the conference call going on as of 2 pm UTC time, it remains to be seen if the community will decide on any course of action related these issues, or if the debate will continue unresolved.
In the end, at some juncture, decisions will have to be made that fit with the overall community’s vision of what Ethereum should be over the long term.
By: BGN Editorial Staff