The proposed Metropolis upgrade for Ethereum will roll out in two phases. The first phase, known as the Byzantium hard fork is now set for October 17, 2017.
The second phase, known as Constantinople has no official release date as of yet.
The Byzantium hard fork does keep getting pushed back in its release, however bear in mind the proposed changes being made to Ethereum are quite thorough and embody the result of months of hard work on the part of various coders.
Here is what you need to know:
You Do NOT Need to Upgrade Anything:
Ignore any emails you receive indicating that you need to upgrade for example your wallet, or that you need to enable 2 factor authentication for your account. These are fishing links.
All of the updates will be done on Ethereum’s end.
The Hard Fork Will Not Result in a New Coin:
Whenever there is a fork, there is always the risk of a chain split, such as what happened with Ethereum’s initial hard fork, resulting in the creation of Ethereum (the updated version) and Ethereum Classic (the original).
At that time, there was major ideological divide in the Ethereum community and many did not agree with altering the blockchain due to “the DAO” hack. The Ethereum Foundation continued forward with the update, essentially erasing the history of what happened and moving their funds to a new blockchain address.
The Metropolis upgrade is vastly different, with many in the Ethereum community united on these improvements, with very little if any resistance to the proposed upgrades. This means more than likely Ethereum miners will upgrade and there will be no chain split.
The Meat of the Changes:
All of the official changes are listed here.
1. Simplified Programming in Solidity: New functionality will be added within Ethereum’s programming to be more conducive to novice programmers, which is huge considering a lot of people struggle with the Solidity coding language needed to create contracts and DApps (decentralized app) on Ethereum.
This will result in increased competition in the smart contract industry.
2. Abstraction – EIP 86: Account abstraction will allow users to have more control over their private keys and the ability for recipients to pay the mining fees instead of having the sender always pay for the gas. This change in the gas payment structure will also eliminate overcharges for network fees from wallets, as gas costs will be adjusted automatically at the time of transactions.
Most importantly, Abstraction – EIP 86 will reduce the risk of being hacked by quantum computing.
3. Foundations for ZK-SNARKs / Zero-Knowledge Proofs: The Ethereum developers are currently working with ZCash, and with the Byzantium upgrade, they will lay the building blocks to implement zero-knowledge proofs or ZK-SNARKs in the future, which will improve scalability, safety, and privacy.
The implementation of ZK-SNARKs will allow a higher-level of anonymity for the Ethereum ecosystem, which should provide a little performance boost, as it eliminates some of the needed computations and allows anonymous transactions to be performed at higher levels.
4. New opcode STATICCALL: “To increase smart contract security, this proposal adds a new opcode that can be used to call another contract (or itself) while disallowing any modifications to the state during the call (and its subcalls, if present).”
Currently the way it works is a smart contract can call another smart contract, and that contacted contract can then edit the state of the contract calling it. This opens the door for security risks and the potential to be hacked.
STATICCALL will now prohibit any such modifications.
5. Mining Difficulty Time-Bomb: According to the development team, the difficulty time-bomb will be delayed by 18 Months, reducing the block times from 24.3s to 14.1s, and dropping the number of ETH issued per block from 5 to 3.
The time bomb introduction is to begin the process of slowly moving Ethereum away from Proof of Work (PoW) over to Proof of Stake (PoS), in what many are dubbing the ‘Ethereum Ice Age’.
PoW means that computational power is needed, not only to produce new coins but to process transactions and to keep the entire ecosystem moving.
Simply put, you need mining equipment and processing power to generate blocks.
PoS requires much less computational power and miners can earn rewards according to their balance.
All you need to do is leave your computer running and your wallet open to generate blocks.
PoS improves scalability, increases decentralization, and even reduces pollution from not having to run extensive hardware.
Ethereum’s inevitable transition over to PoS will make it less profitable for established PoW miners to continue mining Ethereum. This will result in the dispersion of mining power into other PoW cryptocurrencies, creating several potential buying opportunities:
It remains unclear whether the upgrade will initially cause prices to increase or decrease. As mining slows, the price of Ethereum may fall, however, the upgrades should increase the amount of users on the system overall, potentially causing the price to rise.
Ignoring the possible short-term fluctuations, these changes from a long-term diversified investment standpoint make Ethereum a solid addition to have in one’s crypto portfolio.