Crypto miners plan to fork Ethereum, will it make a difference for the merger?
The so-called “merger” of the Ethereum network plans to transform a blockchain with the most developers and a market capitalization of over US$200 billion into a cheaper, faster and more energy-efficient way of operating. Ethereum miners don’t like it.
They argue that changes to the network through the merger freeze them, turning multimillion-dollar investments in hardware into stranded assets.
The miners’ response is a plan to fork the blockchain to maintain the current proof-of-work (PoW) method and keep them in the business of validating transactions on the network and earning Ether tokens as payment.
This may seem like setting the stage for conflict and disruption, but Jonathon Miller, Australian head of US-based cryptocurrency exchange Kraken, said Forkast in an interview that the fork seems dramatic, but he doesn’t care.
“I might fork Ethereum tomorrow [but] will people use this fork? That’s another question,” he said. “That’s a question miners need to ask themselves.” Ethereum is the network of choice for developers and it will remain so for quite some time, he added.
Ethereum had around 4,000 active monthly developers in areas such as decentralized finance, or DeFi, non-fungible tokens (NFTs) and more as of December 2021, far more than any other blockchain, according to a venture capital firm. . The state of a16z crypto in 2022 report.
Forks on the road
A PoW system requires miners to solve complex algorithms using massive banks of expensive and power-hungry computers to validate transactions on a blockchain and they are rewarded with that network’s token.
Proof of Stake (PoS) systems, which Ethereum is transitioning to, are validated by users based on how much of that network’s token they have “handed over” into the network.
The merger is popularly assimilated to changing the engine of a plane mid-flight, it will see the Ethereum mainnet combine with the Beacon PoS chain between September 16th and 19th.
Shortly before that, a “difficulty bombwill trigger on the Ethereum network, dramatically increasing the energy and computational requirements to validate the network, thereby discouraging miners from continuing on the mainnet.
This is not the first major fork for the second largest blockchain in the world. Current ETH mainnet is actually a fork of the original blockchain – rebranded as Ethereum Classic (ETC) – which was forked in 2016 to solve a hack of 3.6 million Ether on the network.
It was a move that divided the community between those who thought it was against blockchain ethics where all transactions are supposed to be immutable or impossible to change, and those who wanted to preserve the value of the network.
“I think in hindsight some people who advocated for this fork may have changed their views over time,” Miller said, adding that there’s not much to learn from this previous fork before the merge, as it was done under very different circumstances.
While ETH and ETC have seen prices rise amid merger interest, ETC’s market capitalization is currently 97.5% lower than ETC’s at just 4.9 billion US dollars, according to CoinMarketCap.
One of the advocates of a PoW fork is Chandler Guo, a former cryptocurrency miner in China who now lives in the US in Silicon Valley and is gathering a team of developers to create an Ethereum fork that retains its cryptocurrency mechanism. original consensus.
“Many miners should close their businesses [after the merge]”, Guo said in a recent interview with Forkast.
Guo was pushed back by the Ethereum community. In early August, ETC Cooperative, an ETC blockchain advocacy group, sent an open letter to Guo saying he doesn’t believe a PoW chain will work.
However, Ben Caselin, head of research and strategy at Seychelles-based crypto exchange AAX Inc., said Forkast he thinks it’s possible, but he doesn’t know if it will be worth it, because Ethereum’s strength lies more in its users and developers than in its miners.
“[Miners] will fork a chain with code exactly like Ethereum and continue mining, but they won’t see the profits go anywhere in the long run,” he said. “Assuming of course the majority of people will use and bet on the Beacon channel.”
Caselin is also not concerned about the fork impacting the merge.
“With so much anticipation for Ethereum POS,” Caselin said, “unless the miners in question can destroy the reputation of the current ETH network through a major hack, a double spend or something else that would convert other validators, they won’t be able to stop the merge.
Rather than worrying that a fork would be disruptive, Kraken’s Miller welcomes it.
“Forks are normal; in fact, that’s how open source software works. Every time there is an update on open-source software, there is debate. That’s the beauty of open source software,” Miller said.
“All the power to people who want to innovate. We might see innovation as a result of the merger that is unexpected, which is a good thing.
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