Ethereum

Istanbul hard fork scheduled for December 4th, next target is Ethereum 2.0

Ethereum startup PegaSys product manager Tim Beiko this Friday revealed an update regarding the upcoming Istanbul hard fork.

“Discussions are ongoing, but there seems to be rough agreement on December 4 as the date for the hard fork. January 8th is also considered as a safety net, ”he wrote, keeping in mind the several transfers of the previous update. Block 9 056 000 was selected tentatively for Istanbul activation.

A total of six backward incompatible code changes will be included in the hard fork. The most controversial of these is the Ethereum Improvement Proposal (EIP) 1884, which aims to increase the computational cost when referring to blockchain for developers of decentralized applications. A number of smaller improvements and new features are also foreseen to optimize and speed up Ethereum..

Istanbul was launched on the Ropsten testnet last month, however, due to the unexpectedly high block release rate, many miners did not have time to update their software in time, which caused interruptions.

To avoid embarrassment when launching an update on the main Ethereum network, the developers approved EIP-2124, which makes it easier for clients to check the version of the network by using the entire transaction history in any of the many existing networks, not just the genesis block data.

Vitalik Buterin on changes in Ethereum 2.0

In parallel, the developers are preparing for the launch of the Ethereum 2.0 network, which will initially exist independently and in the future will allow the second largest cryptocurrency to switch from the Proof-of-Work consensus mechanism to Proof-of-Stake.

Ethereum founder Vitalik Buterin took on the task of educating community members about what they should prepare for with the launch of the second version of the protocol.

Although previously it was said that users would not have the opportunity to return their ETH to the first network after transferring to the second one for security reasons, Buterin allowed the creation of a bidirectional “bridge” between blockchains. To date, the solution required for this has not been included in the Ethereum 2.0 roadmap..

Despite the early launch of the initial version of the new network, according to the developers’ forecasts, the completion of the Ethereum 2.0 infrastructure may take 3-4 years, after which a complete transition will be possible. Buterin expects the preparatory work to avoid embarrassment in the process. “If you are an application developer or user, the changes and unplanned disruptions that you will have to face will be very limited. Existing applications will continue to work unchanged, “he writes..

The founder of Ethereum also recommends that developers prepare in advance for the upcoming increase in the cost of operations, which will allow them to avoid unexpected problems: “You can eliminate the largest element of disruption from the change in gas prices by making sure in advance that you are writing applications with limited storage slots, and access to contracts carried out in one transaction “.

Buterin warned users that Ethereum 2.0 will not launch with 1,024 shards or separate sections of a single database, as originally intended. According to his latest proposal, their number should be reduced to 64, which will speed up the communication process, but will negatively affect the overall computing capacity of the network. “Running with 1,024 shards that have not yet been tested in practice is an operational risk,” the developers say. “We’re targeting half the throughput for transactions from what was previously planned.” In the future, the number of shards will increase.

Ethereum 2.0 Staking Expected Returns

The transition to the new consensus mechanism will entail the transfer of the function of adding new blocks to the network from miners to validators, who will need to provide a deposit of 32 ETH or $ 5,800 at the current rate to obtain the appropriate authority.

Collin Myers, head of global product development at Consensys, predicts that validators can expect to see an annual capital gain of 4.6% to 10.3% paid out as a network maintenance reward. The maximum level of rewards in its formula is achieved if the validators allocate 2 million ETH to support their nodes. Also, payments will depend on the number of validators actively involved in transaction processing..

“Ethereum 2.0 uses a collective reward model. The more people online, the more they all earn together. This is one of the design parameters of Ethereum 2.0, quite innovative and ingenious at the human level. He encourages strangers to do things together, ”explained Myers.

At the same time, it is expected that the real values ​​of rewards with the launch of Ethereum 2.0 will be closer to 5.6% of the share of ETH provided by the validators. But even if the ideal parameters are observed, the size of the rewards should never exceed 1% of the total emission of the cryptocurrency. In this way, developers expect to avoid excessive inflation and depreciation of ETH over time. In the current environment, Ethereum’s inflation rate is about 4.5% per year, and before it reached 18%.

Myers also revealed that he is developing a user-centric application that will help them calculate the expected profitability of ETH 2.0 staking based on their own costs. The release of the tool should take place along with the launch of the Ethereum 2.0 network in the first quarter of 2020.

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