The already challenging shift that the Ethereum blockchain is slated to go through soon, is about to receive a monkey wrench.
Ethereum is expected to undergo a major software upgrade called Merge in early September. It is expected that the network will shift from using multiple computers, commonly referred to as miners, to more energy-efficient validators to order transactions. Change is not being embraced by everyone.
A rising number of factions are planning forks that will essentially continue to run the old version of Ethereum utilizing miners by copying the current software and making a few minor changes.
EthereumPoW is one of the efforts led by Hongcai “Chandler” Guo, who was previously a large Ethereum miner in China and is not semi-retired and lives near San Francisco. He revealed that several Chinese companies making Ethereum mining equipment – which of course would make them obsolete by the merge – have asked him to launch a forking effort.
“Everbody will get free money” when existing Ethereum holders receive new tokens if the blockchain is forked, said Guo in an interview. “Everybody will be happy.”
Since the launch of bitcoin more than ten years ago, when factions struggled for control and direction over many blockchains, forks have been a major part of the cryptocurrency industry. The level of success for spinoffs of Bitcoin Cash, Bitcoin Gold and Bitcoin SV varies. Ethereum Classic has already existed since its split from Ethereum in 2016.
Analysts see numerous obstacles. In many situations, newly forked chains don’t even have explorer tools that measure their usage or lack thereof. They also frequently lack support from app creators, advocates, and users.
“Most discussions about the PoW ethereum fork are relatively short in scope,” said researcher Aidan Mott, Intel manager at Messari, focused on a new token. “However, meaningful planning and research in supporting the ongoing logistics of a new network has been very light.”
Vitalik Buterin, the co-founder of Ethereum, at the Bidl Asia 2022 conference held in Seoul, South Korea, this week dismissed the forking efforts as adding little value and emphasized that they hardly provide any differentiation from existing blockchains.
“I don’t expect Ethereum to really suffer much from another fork,” Buterin said in a webinar on Saturday. “My impression from everyone I talk to in the Ethereum ecosystem in general is that they fully support the proof-of-stake effort and that the ecosystem is pretty cohesive around it.”
However, Guo claimed to have a team of 60 developers working on a fork, which would necessitate modifications to the current software to get rid of the menacing-sounding difficulty bomb, a software feature intended to force the switch from the current proof-of-work system to the new validator-based proof-of-stake (PoS) system (PoW).
The best course of action appears to be in doubt. Guo claimed Galois Capital, a hedge firm, has not been contacted despite the fork’s prediction.
According to a message sent to Bloomberg, all forked proof-of-work Ethereum currencies will be supported by crypto entrepreneur Justin Sun’s Poloniex exchange. Tron, the blockchain Sun built, already employs proof-of-stake.
“Proof of work is essential for Ethereum,” because it is so reliable, Sun said. “For the POS smart platform, we have Tron.”
The only option for miners to continue working might be to endorse a fork. They will have to decide whether to maintain lesser chains like Ethereum Classic, repurpose equipment, or sell their machines after the Merge. Hive Blockchain Technologies Ltd. announced on Friday that it will think about mining Ethereum Classic instead.
“We generally back anything that pays us well, which we can get behind,” said Chris Kyle of Flexpool, which helps many smaller miners backing Ethereum. Although he noted that he hasn’t seen any strong proposals yet, that doesn’t mean a fork won’t work, he said.
“One thing I will note is that crypto tends to be pretty illogical,” Kyle said. “Many networks/coins have little actual value, it’s all speculation. So a successful fork would likely need someone/something famous behind it, if they get that — then it’s possible.”
Many businesses will probably adopt a wait-and-see approach. Taylor Monahan, who is currently the global product lead at cryptocurrency wallet MetaMask, led the development of MyEtherWallet in 2016, even though he previously stated that it would not support the Ethereum Classic fork. The company quickly changed its mind.
“With all the things we had happen back then, I’d never say that today,” Monahan said, adding that MetaMask would have to weigh whether to support another forked token. “If there’s an opportunity for someone somewhere to make a boatload of money, it will probably happen.”
