October 29, 2020

Istanbul hard fork on the Ethereum blockchain - what changes await us?

Istanbul hard fork on the Ethereum blockchain - what changes await us?

Activation of the Istanbul update in the Ethereum core network will occur at block No. 9056000. Tentatively this will happen 4 December of this year. It is expected that this will be another step towards solving the main problems of Ethereum: scaling and high commissions.

What will change in the work of the Ethereum blockchain and how Istanbul hard fork will affect the work of projects launched on the basis of the second-largest cryptocurrency capitalization network, Mining-cryptocurrency.ru figured out.

Why is Ethereum updated?

Ethereum's main problem is scalability: the network is already full and is operating at full capacity. The more popular the network, the less effective it becomes. At Ethereum, the transfer fee depends on the amount of resources spent (“gas”) and their cost (price of “gas”). At the same time, there is only one correction mechanism - price increases. Because of this, transactions are progressing more slowly, and the cost of "gas" (transaction fees) is growing. So, by September 2019, the cost of “gas” in the Ethereum network increased 30 times - from $ 0.004 to $ 0.012, and the transaction cost - up to $ 0.3 (which is expensive for a large network). So if you do not solve the problem, then sooner or later, developers will be forced to switch to another blockchain.

Relatively Slow and Not So Effectiveas before, Ethereum is still regarded as a universal blockchain that allows you to create almost everything. However, new, more specialized solutions are starting to appear in other networks. Competitors - TRON, EOS, NEO and Steemit, TomoChain and Binance Chain - have long been claiming the Ethereum throne. In its current form, Ethereum has reached a technological dead end. To get out of it, developers have been working on the transition of the network to Ethereum 2.0 for several years.

Istanbul - Ethereum System-wide Update,which will change several aspects of network functionality, including data storage, mining protocol and code execution. Hard fork will allow the network to become cheaper, faster and more scalable. Istanbul is the latest update in the Metropolis series, while the next Berlin update will launch Ethereum 2.0.

When is Istanbul update activated?

Istanbul activation has been postponed several times: first on August 14, then on September 4 and then on October 16. And so the developers decided on a new date - December 4.

It is worth noting that in January 2019 duringConstantinople’s latest system-wide update has delayed activation of its Mainnet update for a month due to a critical code vulnerability that was discovered just 48 hours before the planned upgrade. Then 10% of the miners still separated from the main network, and the launch of Constantinople occurred simultaneously with the activation of the St. Petersburg update. In this connection, in case of unexpected problems, the developers set a reserve activation date for Istanbul - January 8. A month should be enough to fix everything.

Simultaneously with the main update will beEIP 2124 upgrade (Ethereum Improvement Proposal - proposal for updating Ethereum) is activated - fork identifier for checking network compatibility. It launches a mechanism that determines through which version of the software the host works. This will help ETH miners choose the right blockchain - the one that most support.

In September, Istanbul was activated in testRopsten Networks. But due to the unexpectedly quick confirmation of blocks, some miners did not have time to update their software, and the network was divided into two chains.

What will change in the Ethereum code on December 4th?

The developers decided to activate Istanbul in twostage. On December 4, the first of them starts, within the framework of which six approved fundamental changes to the code, or EIP, will be launched. They will reduce and optimize gas costs, allow Zcash to be compatible with Ethereum, and protect the network from duplication of transactions.

In the first quarter of 2020, developerstransfer the network from the mining algorithm from PoW to ProgPoW (EIP-1057) and start the changes in the Ethereum virtual machine. This should reduce the advantage of ASIC miners and solve the main problems of Ethereum.

We will analyze six innovations in the code that will be launched on December 4. Basically, these are technical changes to reduce the cost of "gas".

  • EIP-152: adding the Blake2 F compression function for pre-compilation, optimizing the operation of the blockchain and performing relay and atomic swap transactions between Zcash and Ethereum.
  • EIP-1108: reduced costs for the precompilation (reassembly) of "gas", which should increase the confidentiality and scalability of the Ethereum network.
  • EIP-1344: Add ChainID Operation Code. This will allow smart contracts to track the correct chain when processing signatures and to prevent re-attacks between different chains.
  • EIP-1884: increases the cost of computing (virtual machine opcodes, that is, instructions for smart contracts) when accessing the blockchain for dApps developers.
  • EIP-2028: Calldata gas cost reduction from 68 Gas per byte to 16 Gas per byte. Price calculations are “backed by mathematical modeling and empirical estimates.” This will make it possible to make decisions of the second level, thereby increasing network bandwidth and prove that solutions zk-SNARKs and zk-STARKs (varieties of Zero Knowledge Protocol, a zero-disclosure proof protocol that does not require direct password exchange) are cheaper and more efficient.
  • EIP-2200: rebalancing the cost of “gas” SSTORE taking into account changes in the cost of gas SLOAD (reading from the storage) This will change the calculation of the cost of storing data in the EVM (virtual machine) and allow smart contracts to introduce new features, including re-entry locks and resubmission of several contracts.

Potential smart contract issues after activating EIP-1884

EIP-1884 provides for an increase in value"Gas". This is the most controversial update of the hard fork, which even some of the leading developers did not agree with. However, the need to launch it is explained by the fact that with the growth of the Ethereum network, some smart contracts used in dApps have become too resource-intensive.

As the blockchain size has increased,the computational costs of obtaining data on the state of the network (such as account balances) also increased, and the price of “gas” remained the same - this created an imbalance between the cost of the operation and the consumption of resources. This mismatch creates vulnerabilities for a number of attacks. To reduce the possibility of network congestion, EIP-1884 raises the price of gas for three resource-intensive, but cheap operations. This should prevent spam attacks and better balance the blocks.

The problem is that part of the smart contracts waswritten without considering that the prices of "opcodes" may change. Accordingly, the proposed update attracted attention and initiated a discussion in the Ethereum ecosystem.

Some developers believe that changing the rulesgames in this way are unacceptable. For example, Parity Technologies programmer Wei Teng expressed his concerns about possible problems with EIP-1884 in a series of tweets. He believes that it would be fair to use the current price of “gas” in current smart contracts, and in the next - a new one. This is an implemented function. However, such compatibility is not planned to be launched due to lack of development time. He notes that Istanbul is likely to violate several detailed contracts. These may be isolated cases, but Tenga is worried that some developers seem to think this is acceptable.

“One of the reasons Windows has becomepopular, is backward compatibility .... You can run old operating systems on modern processors. Ethereum should not be an exception if we want to have a bright future ”- summed up Teng.

Activation of EIP-1884 may also result inthat some of the dApps may break. For example, the cost of an SLOAD operation (reading from storage) will increase from 200 to 800 gas per operation. This will affect, first of all, two types of smart contacts: holding complex data structures in the storage and actively using them; as well as contracts that had a choice - calculate the value each time or calculate once and remember (now this strategy will become unprofitable).

Moreover, EIP-1884 may interfere with680 smart contracts that manage decentralized ethereum applications on Aragon and Kyner Networks, or raise prices for end users. Now their developers are working on ensuring the work of projects after the update.

Moderator of the Ethereum Core meeting Hudson Jamesonagreed with the position of Tan, but advised the developers to consider that the prices of "opcodes" may change in the future. Vitalik Buterin supported EIP-1884, noting that he would like their price to be even higher.

Will updates affect the price of ETH?

Given the planned nature of the majorityEthereum, Istanbul updates, most likely, will not significantly affect the price of the coin network. At the same time, delays in the implementation of the roadmap often negatively affect the price of ETH. If this situation happens again, the coin may sag. However, even in the event of an initial recession or stagnation, the long-term impact of the fork is likely to be positive due to upgrade improvements for scalability, cost, and speed.

In February 2019, before awaiting activationIn a few weeks, Constantinople and St. Petersburg rose from $ 105 to $ 157. At the same time, a few days before the hard fork, the course began to fall and recovered only in early April.

Of course, Istanbul will improve appeal.Ethereum in the eyes of users. But, it seems, so far there are no prerequisites for a sharp increase in the price of ETH. The ICO boom has long passed, and the December 4 update does not solve all the network problems. It will be much more interesting to follow the price spikes on the eve of the long-awaited transition to Ethereum 2.0, expected at the beginning of next year.

Ethereum's most ambitious update yet to come

Activating Ethereum 2.0 is planned in the first quarter of 2020. Refinement may take 3-4 years, during which two networks will operate in parallel. Buterin promises that existing applications will continue to work without changes. But developers should prepare in advance for the rise in price of operations.

Hard fork will increase network bandwidth to15,000 transactions per second, will reduce transaction processing time, switch to the Proof-of-Stake (PoS) algorithm, reduce commissions and expand the functionality of smart contracts.

The move to Ethereum 2.0 should solve the problems of security, decentralization and scalability and reduce costs by 100 times. December updates are necessary steps towards this.

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