Miners Will Face Short-Term Pain After Hard Forks Activate on Ethereum
The long-awaited Constantinople and St. Petersburg network upgrades has successfully activated on the Ethereum blockchain,the world’s second largest crypto project by market cap, at 19:57 on February 28 (UTC) without incident, paving the way for Ethereum towards its Proof-of-Stake(PoS) implementation.
Both upgrades took place at the exact same block number—7,280,000, and the block with 118 transactions was mined by the miner called MiningPoolHub_1 which got a block reward of 2.046 ETH, according to Etherscan.io. Consensus among Ethereum developers shatters some speculators’ hope for a chain split and a hard-forked offspring of Ether, the main cryptocurrency of the network.
The Constantinople hard fork was initially scheduled to go live earlier in January,but a major vulnerability only a couple of days before the upgrade’s implementation, forcing Ethereum developers to halt the upgrade.
With the official release of Constantinople and St. Petersburg, four different Ethereum improvement proposals(EIPs) have been activated on the Ethereum network, one of which cuts the block reward from 3 ETH per block to current 2 ETH, reducing miners revenue by a third.
A Chinese programmer named Wang Zhou told Fengchao Finance, a blockchain media platform, that the reduction of the block reward may dissuade miners, sending more marginal miners out of business or forcing some miners to mine smaller cryptos with proof of work(PoW) algorithm after the two upgrades activate.
Wang said Ethereum’s big move to proof-of-stake “ does not appear to be very friendly to miners in the short term, but in the long run, the consensus algorithm change will help the world’s first blockchain-based network for developing decentralized applications (DApps) regain some lost ground in the public chain market.”
Last time the mining rewards were dropped from 5 ETH to 3 ETH, the crypto market was booming and miners were raking in the cash. But this time, the success of the much-anticipated hard fork has not stirred up some volatility in the market. At the press time, Ether is trading down 0.09 percent at around $137, according to coinmarketcap.
Guo Yuzhi, chief operating officer of Panda Miner, a China-based crypto mining hardware manufacturer, said during a recent AMA (Ask Me Anything) discussion on 8BTC Forum that the Ethereum’s latest hard fork is among several factors to set off the next bull run as Ethereum moves one step closer to become a more scalable decentralized platform.
“The primary missions for the Ethereum community in the future include launching its proof-of-stake (PoS) system and implementing sharding , which will make qualitative leaps in Ethereum’s performance and will form the backbone of the crypto market’s next bull run,” said Guo.