Ethereum developers have agreed to a set date for the Metropolis Constantinople upgrade which is now “scheduled for block #7,080,000, estimated around the 16th of January, 2019,” according to Péter Szilágyi, maintainer of ethereum’s most used node client, Geth.
The much anticipated uncontroversial upgrade implements a number of efficiencies for developers, with the headline being a reduction of miners’ reward from 3eth per block to 2eth per block.
That will bring new issuance down to 4% a year, from 7% – about the same as bitcoin – at the same time as the difficulty bomb is delayed.
The difficulty bomb is a network level algorithm that exponentially increases the amount of work required to mine a new block so as to make any miners’ resistance irrelevant when the network effectively gets rid of them through the Proof of Stake (PoS) upgrade which replaces miners with eth “savers” or stakers who provide sybil resistant security.
PoS has been slightly delayed and by the looks of it Proof of Work (PoW) miners will be around for quite some time.
That’s because ethereum is to move in a parallel roadmap in its transition to world level scaling. Meaning the upgrade in or around the 16th of January may be the last of its kind as far as the current composition of the public blockchain is concerned.
Around an estimated two months after that, there will be a March launch of the PoS Beacon Chain testnet. Once that goes live a few months after, perhaps during summer, ethereum’s inflation may be reduced to just 0.8% a year.
That’s because the security provided by PoW miners will still be needed, but at a far lesser degree than currently due to stakers effectively voting checkpoints. As in, this is the true history and you as a miner can’t change it anymore.
Due to that lesser security provided, miners will be rewarded less, at about 0.6 eth per block or so. At the same time whoever wants to lock up eth and take on some of the risks of staking will in combination get about 0.2 eth per block.
For the stakers, that translates to an interest rate of about 5%-8% a year, but that’s on only part of the eth supply.
There are currently only about 104 million eth. It is estimated that about ◊10 million might stake, thus a 5%-8% interest rate for them translates to an inflationary rate of less than 1% on total supply, including the miners’ reward.
While the Beacon Chain is built in stages in a sort of testnet+ environment (minus the mainnet security level for staking we should think), with it so moving towards that holy grail of sharding, the PoW chain will keep on running kind of as it does now.
There is however plenty that can be done to improve the current PoW chain. So that’s what eth devs have proposed.
They have suggested a sustainable method of 10x scalability even before sharding goes live, with it too to be implemented in stages in another transformation of sorts that aims to build a scalable blockchain for generations.
So while much work will be going on in the Beacon Chain to shard it whereby not all nodes need all history, but are bundled into validating only parts of it with those parts then merged into one network, much work will likewise be going on in the PoW chain whereby rent storage and pruning is to be implemented.
The image this all brings to mind is that buzz of rebuilding western Europe in the 50s with the simple roads sort of transformed into highways and the airports built and so on.
Likewise the current versions of public blockchains need a lot of work to turn them from a simple skeleton useful to only a few – or razed houses if we go on with the analogy – into skyscrapers with buzzing commercial activity.
Conceptually the plan seems sound provided some very complex mathematical problems are indeed resolved as far as the PoW chain is concerned regarding data availability. For the Beacon and the shards, devs have said all the main/theoretical problems have been solved.
So January 16th might not bring a huge upgrade save for maybe traders and investors, but it may well be a symbolic day as it marks the end of the simple blockchains, or the beta phase, or the coder’s toy, and the beginning of a transition phase that gradually – like the TV signal no longer goes down or Wi-Fi does so far more rarely or planes no longer crash so often or cars have way overpassed horses in speed – so too the public blockchain may become an efficient and convenient part of daily life that doesn’t quite reveal itself to you, or doesn’t annoy you, but reveals mainly or only its benefits and lets you get on with easily utilizing it for whatever need.
In short, it’s the beginning of the happening, or so we hope.