Ethereum January 2024 Hard Fork Unveiled

Ethereum Hard Fork

A hard fork requires all nodes or users to upgrade to the latest version of the protocol software. After it activates, all network nodes are supposed to upgrade their software and begin working in accordance with the new rules. At the same time, nodes that continue running outdated clients will see their blocks declined by a network as invalid. As a response, the Ethereum community moved to recover the funds by voting to change Ethereum’s baseline code to recover the lost funds and reimburse investors. As a result of the majority vote in the favor of this proposal, a hard fork and two separate blockchains were created. After consensus is reached on what changes should be included in a hard fork, changes to the protocol are written into the various Ethereum clients, such as geth, Parity, and ethereumJ.

In some cases, a hard fork may result in the “splitting” of a blockchain, creating two competing networks. For example, Bitcoin Cash is a hard fork of Bitcoin that has split from the main network. In other instances, like with Ethereum’s Istanbul, a hard fork is used to upgrade a blockchain. For example, the Ethereum FAQ page says that "It's not accurate to think of Eth2 as a separate blockchain" because of a planned "merger" event down the road.

All Eyes on Ethereum Dencun Upgrade

This makes sense because there are usually no legitimate reasons to implement a hard fork in a normally functioning cryptocurrency. The keyword is usually, though - as you'll see soon enough, Ethereum is an exception. A fork in the cryptocurrency world is known as a change in that currency's protocol. This type of change makes previous versions of blocks valid and the current version invalid (or the other way around).

A simple swap on the Uniswap for example is as high as $100 while others could be $16–20. A hard fork is a radical upgrade that can make previous transactions and blocks either valid or invalid and requires all validators in a network to upgrade to a newer version. A soft fork is an upgrade to the software that is backward-compatible and has validators in an older version of the chain that sees the new version as valid. On July 20, 2016, the Ethereum Hard Fork occurred on the ​​1,920,000th block of the chain.

Constantinople EIPsOfficial improvements included in this fork.More

For example, these include upgrades like the Ethereum Spurious Dragon, Ethereum Byzantium, Ethereum Constantinople, and the Ethereum St. Petersburg upgrades. In late 2019, the Ethereum Istanbul update was released, which was the last hard fork before Berlin. It was eventually followed by other notable updates during 2020, like that of the Ethereum Muir Glacier upgrade, the launch of the Medalla testnet, and the Ethereum 2.0 Beacon Chain. Cryptocurrency forks are events within the cryptocurrency's blockchain that aim to change certain specific aspects of the crypto in question. They change the cryptocurrency's protocol itself, rendering the older versions of that protocol invalid. If it (the older version) continues to live on, it will result in a split from the new version.

But experts tell CNBC that the problem with this logic is that in the next few years, ethereum miners are approaching a cliff that will make them obsolete. In fact, included among Thursday's upgrades is a stipulation that addresses this very mining Armageddon. They are called EIPs for short, and each puts forth a set of changes to the code.

Bitcoin Cash

As such, this EIP will enable a new type of transaction where accessing inside the access list is cheaper. This new transaction type builds on EIP-2718 and introduces an asset list format to Ethereum. Furthermore, EIP-2930 also reduces risks of contract breakage otherwise introduced with EIP-2929. Naturally, a portion of the crypto mining population will find certain specific loopholes and ways out - resell the GPUs, rent out rigs or even start mining other cryptocurrencies, forgetting Ethereum as a whole. The world of cryptocurrencies is constantly finding new and different ways to develop and advance, whether it be from a technological perspective or information-wise.

Ethereum Hard Fork

In the proof-of-work mechanism, different users (miners) try solving highly complex algorithms. A new block is added to the blockchain when this algorithm is solved successfully. It can best be described as a set of upgrades to get the entire blockchain ready before moving towards the proof-of-stake system, making it more sustainable and energy-efficient. But, first, we need to cover what the Ethereum London hard fork is specifically.

Initially, the SHIB burn mechanism will be manually conducted by the official deployer wallet. However, an automated SHIB burn mechanism is expected to be introduced in January 2024. Recall that, unlike most POW networks, Ethereum is way beyond currency and has to measure up to accommodate varying use cases and features. However, it is certainly a fork Ethereum enthusiasts are looking eagerly towards. It would also switch the consensus algorithm of ETH from proof-of-work to a less labor-intensive proof-of-stake.

Ethereum Hard Fork

But burning those fees will also mean a major shift for miners, leaving them with really only two revenue streams. "It only creates deflationary pressure under the condition that burned fees actually exceed new issuance," said Carter. If you think of ethereum like a highway, London is adding a few lanes to tamp down traffic and is standardizing toll prices. Ethereum's much-hyped and somewhat controversial "London" hard fork has just activated. With no single person in charge, whole communities end up being involved in implementing upgrades. The staking deposit contract introduced staking to the Ethereum ecosystem.

Hard forks [1]are a protocol change which isn’t compatible with the older version of the cryptocurrency. The participants can choose to operate in any version, and they both would continue to live on as two separate chains. As the name implies, these forks don’t have a significant impact on the change of protocol. It is because these forks are backward compatible with the previous versions.

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