Altcoins

Ethereum Sliding into Ice Age

Ethereum’s ice age refers to the hard-coded protocol in its basic code that was introduced to ensure that all users have incentive to move to the new blockchain if an older one ever becomes obsolete. Essentially, it was programmed to raise difficulty exponentially. It is extremely arduous for the miners to keep up with the rising difficulty, consequently the new blocks in the blockchain will remain untouched, and hence the term “Ice Age” is used to discuss this phenomenon.

To avoid the ice age, the suggestions about multiple actions to be taken in this case are pouring in. These actions would ensure that the system would not actually freeze.

One of them was to shift from proof of work (POW) to proof of stake (POS). The two differ from each other in the way that proof of work, which was originally the system bitcoin adopted, there are miners. Miners have one task. They solve computational problems whose difficulty level is moderate and is to be verifies by other parties on the network.

However, in proof of stake, in order to participate you have to have some stake or allotment of token. It can also be called a type of investment. In case you win a block, the reward or gain will be a percentage of the investment. Looking at how the difficulty may rise you might need to switch to better machinery in proof of work which can be quite costly. However you only need cryptocurrency in case of proof of stake.

This change was to be introduced and the system named Casper is nowhere near ready to be deployed. So as to deal with this situation, the ice age must be avoided. To delay the ice age, would give birth to new problems.

Miners will easily find the blocks.Therefore, the ether rewards, which are currently 3 ETH, should be decreased to ensure that the cryptocurrency is produced at similar rate. There is no fixed rate about how much reward is to be given. Some miners want them to increase whereas some want them to decrease.

Lane Rettig, an ethereum developer, states;

The postponement of the bomb isn’t particularly controversial, but the issuance is controversial. But for that reason the whole thing is controversial, you can’t have one without the other.

Jameson Hudson, who is a communication officer for ethereum, made a suggestion which would solve both problems one at a time;

I think decoupling them would help us create priorities, where we have one thing which is an economic and technical change and the other which is a pure technical change that isn’t as controversial a thing,

Many analyst and developers were against this statement because they deem these two problems to be inter-related and claim these have to be tackled together.

Multiple suggestion have come into consideration, two of which are to be released in 2019. They aim to remove the difficulty bomb completely, EIP 1240, which removes the bomb, and EIP 1276, which removes the bomb and alters Ethereum’s reward structure, lowering the current issuance of 3 ETH per block to 2 ETH.

Two of them propose to delay the bomb; they are EIP 1234 and EIP 1227, although both function with different conceptualization.

Lastly, these two effect the reward only. They do not impact the difficulty bomb but cuts the reward to 1 ETH (EIP 858) and EIP 1276 wants to change the reward to 2 ETH.

Adding on there is also the issue of how much security that miners pay should be increased. The reward usually comes from these payments. This security provides safety to the network. That is where Casper comes in. However, the proof of stake system that was to be introduced is still a no show.

Rettig said,

If you rewind way back two or three years ago when this difficulty bomb was first installed, the plan was we will be on Casper by now, by 2018. If that had happened then the bomb would never have been an issue.

Even with Casper, the issuance schedule, the rewards, the inflation, all that has never been worked out. It has never been finalized, this is called the parameterization of Casper and it’s still very much a work in progress.

There are also some developers who argue that the bomb should remain indefinitely while are some people like Augur developer, Mical Zoltu, argue that the bomb should be removed completely from the system. Ethereum’s core developer, Nick Johnson said;

It lessens the default effect of inaction being the most attractive option,

Whether or not the bomb is completely removed, or a decrease in rewards is instantiated, actions to rectify this situation have to be taken to save ethereum from ice age.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.