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 the Merge, as early as September. It is expected that the network will shift from using scores of computers, generally referred to as miners to more energy-efficient validators to order transactions. The 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 spearheaded by Hongcai “Chandler” Guo, formerly a large Ethereum miner in China and is not semi-retired and living near San Francisco. He revealed that a number of Chinese companies manufacturing Ethereum mining equipment – which certainly make them obsolete by the Merge – have asked him to start the 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 of numerous blockchains, forks have been a staple of the cryptocurrency industry. Success levels for the spinoffs of Bitcoin Cash, Bitcoin Gold, and Bitcoin SV vary. Since splitting from Ethereum in 2016, there is already Ethereum Classic.
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.
Aidan Mott, intel manager at researcher Messari, said “most discussions around PoW Ethereum fork have been relatively short-sighted in scope,” focused on a new token. “However, meaningful planning and research into supporting the ongoing logistics of a new network have 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 be significantly harmed by another fork,” Buterin said in a webinar on Saturday. “In general my impression from pretty much everyone I talk to in the Ethereum ecosystem is they have been completely supportive of the proof-of-stake effort and the ecosystem has been quite united 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 seems to be in doubt. Guo claimed that Galois Capital, a hedge firm, hasn’t contacted despite their predictions of a fork.
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 to Ethereum,” since it’s very reliable, Sun said. “For 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 support anything that pays us well, that we can get behind,” said Chris Kyle, of Flexpool, which helps many small miners to support Ethereum. While he notes he hasn’t seen any strong proposals yet, that doesn’t mean a fork won’t take off, 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 attitude. Taylor Monahan, who is currently the global product lead at the cryptocurrency wallet MetaMask, led the development of MyEtherWallet in 2016, even though it had earlier said that it wouldn’t 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.”