Everything to Know About the Upcoming Constantinople Ethereum Hard-fork
These improvements will significantly optimize the code for developers bringing increased efficiency & performance to smart contracts, significant gas cost savings, and major economic changes. Constantinople enables smart contracts to interact with off-chain data and the capability to bring second-layer solutions to the network. These second-layer possible solutions include: sharding, implementation of Zk-SNARKS, & plasma.
The reduction of the block reward per block to 2 Ether will likely have major implications on Ethereum’s economics moving forward.
In 2019 alone, the effect of Constantinople is estimated to lower the anticipated generation of Ether by 2,459,467. The total amount of Ether that was set to be generated currently was 7,378,402 Ether, with an anticipated inflation rate of 7.4%. After implementation it now drops to 4,918,935 Ether and an inflation rate of 4.7%. This brings the inflation rate of Ethereum significantly closer to that of Bitcoin’s which is currently 3.83% as writing.
The impact on miners could decrease profitability of mining even further in the short-term & it’s difficult to tell what will happen to the Ethereum hashrate as a result. However, this update should prove to be bullish for the medium and long-term outlook of Ethereum.
How Should I Prepare for the Fork?
In the past there was controversial hard fork that occurred in 2016 after the DAO collapse that resulted in the split of the Ethereum blockchain into two district surviving chains (Ethereum & Ethereum Classic). The largest mining pools and virtually every significant exchange however has voiced their support for the upgrade making chain split very unlikely.
There is no need to move any Ethereum in order to be prepared for the fork. All exchanges and services (Coinbase, Kraken, ShapeShift, MyCrypto, MetaMask, Trust Wallet) will be updating their nodes and won’t require any action from their users. If you however are running a node (Geth/Parity on your home computer), you will need to update your software to the newest version.
It’s advisable to avoid sending any Ethereum transactions around January 16th during the fork to prevent the risk of any issues arising. Be cautious as there is likely to be an increase in scam attempts where malicious individuals attempt to take advantage of individuals by making false claims about needing to claim new coins, etc.
The newest update in the Ethereum protocol, Constantinople, is paving the way for the eventual transition to Proof of Stake (POS) that is set to come with Serenity. There is significant growing competition in the protocol space from other project. These improvements are preparing the Ethereum network for the eventual implementation of the major scaling solutions that should help to ensure longevity and competitiveness in a space that is always innovating.
It’s unknown if Constantinople will ignite a rapid return to the wild speculation that took Ethereum to over $1200 a year ago. But it will surely be a major key element to Ethereum as it attempts to facilitate true real-world adoption.