Ethereum, when it was launched, spared a huge revolution within the blockchain developers community. Even though Bitcoin allowed scripting, Ethereum allowed a lot more. It was, in fact, Ethereum and its new set of features that made ICOs such a success and almost made crypto a household name. But it might be this thirst for new features that may lead to the undoing of Ethereum itself. Ethereum, when it was launched, was hailed as the Bitcoin 2.0. Even though it was not a fork in any way, it definitely caused a split in the crypto community. Now, further splits within Ethereum are threatening its future.
Hard fork vs soft fork
A fork happens when there is a change in the underlying code of the blockchain. This is usually done to add new features or fix some errors. Since most blockchains are open source and run democratically, any change in the blockchain requires consensus, and since it is human nature to quarrel many times, a uniform consensus cannot be reached. This lack of consensus leads to a hard fork, with people supporting the new rules branching off and those supporting the old chain keeping business as usual. In a hard fork, two separate chains will be formed and they will not be interoperable. But if consensus can be reached, a soft fork can be reached leading to a transition that does not create a new chain. When a hard fork happens, the entire community will be split, including the users, investors, and developers, and this has far-reaching consequences
The first hard fork that happened with Ethereum happened around July 2016, when the Ethereum community decided to do a hard fork to the blockchain in order to reverse the effects of a hack. The hack happened to a venture capital fund called DAO and in reversing the hack, the immutability of blockchain is compromised which lead many to stick with the old chain leading to Ethereum(ETH) and Ethereum Classic(ETC) hard fork. The next hard fork was Expanse(EXP). Even though technically, EXP could have been another ICO, Expanse decided to go with a hard fork. They came in saying that it was the second ethereum fork, staying similar in many aspects to Ethereum including mining. Yet, Expanse is designed to function more like a DAO (Decentralised Autonomous Organisation) than a cryptocurrency. Quorum is unlike any of the previous forks as it is a private fork developed by a team which has the support of JPMorgan Chase. It is a permissioned blockchain with focus on privacy, mainly developed with the focus of facilitating banking operations.
Out of the several future planned forks, these 3 are the most significant:
Classic Vision Hard Fork – 11 Jan 2019
Ethereum Nowa Fork – 12 Jan 2019
Constantinople Fork – 16 Jan 2019 (or earlier)
Said to commence operations on January 11th of this year, the Ethereum Classic Vision hard fork proposed a world where cryptocurrencies are as normal as current banknotes. The complete rollout will take place throughout the whole of 2019. Planned in 4 steps, the whole process will be finished in Q4 of 2019. The second fork of the month is the Ethereum Nowa Fork, which was scheduled to be rolled out on Jan 12 but apparently, the project seems to have been taken down. The last fork to be rolled out this January is the Constantinople Fork which is scheduled for January 16th, 2019. The date was announced via Twitter by Ethereum developer Afri. It comes with the usual promise of making Ethereum faster and less expensive to operate. The main change is in the transition from using proof of work protocol to proof of stake protocol. Also, the reward for miners will be reduced from 3 ETH to 2 ETH. This move delayed the launch of the fork as developers could not come into a consensus with the miners.
Will Ethereum survive?
These new forks will surely test the endurance of Ethereum. Even though in the long term what will happen cannot be predicted, in the short term the price of Ethereum will surely take a hit. It is not the price or the user base migration that will be the main concern, but the fragmentation of developers and investments that will cause the greatest concern. It will reduce the overall strength of Ethereum, but for the whole of crypto space newer features means more improvement and only the best will survive leading the industry to a better future. It is the future of Ethereum that is in question.
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