DeutschThe Ethereum system has barely completed its hard fork called “Istanbul” when reports of the next event of this kind are already on the horizon. In January 2020, the next hard fork, “Muir Glacier”, is scheduled to follow Istanbul and bring further optimizations in terms of transaction times. However, many laypeople lack an understanding of what the hard fork on the second weekend of December is all about and what consequences this technological step has for the community. After all, the prospect of a significant increase in the number of transactions processed per second within the blockchain is only one component. However, these should certainly not be underestimated for the upcoming development and importance in the market.
What Exactly is a Hard Fork?
In order to understand the opportunities that arise from the Istanbul Hard Fork, it is necessary to understand the measure as such. Here is a brief summary of the topic. The term “Fork” stands for a branch or bifurcation in the open software system, in this case in the universe of Ethereum. In many cases, different opinions of different developers (teams) are the starting point for such bifurcations in the system source code. Other reasons are also conceivable. As in the current case of the “Istanbul bifurcation”. The decentralized orientation of the blockchain ensures that developments within the source code proceed relatively slowly. Forks arise all by themselves as part of the further development. In the case of Ethereum, for example, Ethereum Classic presented itself some time ago as such a “split” in the network.
Hard Fork vs. Soft Fork – Two Sides of the Same Coin
In addition to “Soft Forks”, “Hard Forks” are the most common “fork types”. Soft forks are characterized by protocol upgrades that are compatible with older but not newer program versions. No new currencies are created. If there is a hard fork, it is a so-called “absolute protocol change” for which all members must update their software. If this does not happen across the board, several individual chains can arise in a worst-case scenario. In addition, the aforementioned backward compatibility with earlier protocol versions is no longer applicable. Ideally, all miners in the network update their programs so that everything remains the same – only with new technological framework conditions. This is most likely to happen with planned and well-founded network upgrades.
What is the Significance of the Ethereum Hard Fork Istanbul?
“Istanbul” is also often referred to as version 3.3. One improvement is, among other things, the significant correction in the inclusion of energy prices against the background of opcode costs. In addition, the system should be better protected against impending systemic failures due to the technical changes. It is also interesting that the past hard fork is intended to ensure, and probably will, that the Ethereum and Zcash systems move closer together and can interact better with each other. In the event of a case, forks can also create new or closer alliances in the cryptocurrency market.
What Does the Software Update via Hard Fork Mean for Ethereum?
First and foremost, it should be mentioned here that the hard fork as a technical upgrade makes several positive changes recognizable – of course in a positive way, as one would expect from such a step. Within the Ethereum network, the now existing option to modify the system through a new solution using second-layer scaling is at the top. The result of “Istanbul”: The installation of this innovative solution offers users a TPS rate of 3,000 and more in the future. TPS stands for “Transactions per Second”. But this is only one aspect. At least as important for Ethereum users are undoubtedly the information on high data protection standards and increasing decentralization of importance. Both points could make Ethereum even more interesting for undecided investors compared to other systems such as Bitcoin or Litecoin.
In addition to the improved “interoperability” with Zcash, it should also be mentioned that the developers want to enable the introduction of new contract variants (smart contracts) with more innovative functions.
Developers Had High Expectations from the Start
The originator of the second-layer implementation is the company Matter Labs. The same company received a grant from the Ethereum Foundation itself at the beginning of 2019 to give it the opportunity to start development work. The solution is based on the approach of a zero-knowledge proof. The result is called “ZK Sync” and is the basis for the good solution when it comes to data protection. The developers also explicitly relied on the experience of users in their work. From an expert point of view, this decision was a wise one, which is also confirmed by the management of Matter Labs. The Ethereum system must continue to meet the technical requirements and application wishes of the members of the community even after the upgrade, they say.
Transactions should also Become more Secure
Not to mention, of course, the system’s ability to realize a noticeably higher throughput for transactions. In any case, the decentralized aspect must be preserved. With the hard fork approach (as well as all those that are likely to come), Ethereum’s mass compatibility is to be promoted. The following criteria were summarized in the presentation on the hard fork:
- exemplary privacy for users
- fast/short execution times for transactions
- high transaction security
- low transaction costs and secure
Transactions must of course also be processed smoothly and without delays. The ZK Sync approach is intended to meet these requirements through the Hard Fork Istanbul. The transactions made are now stored outside the blockchain, while the funds in the system are bound to the actual mainchain by smart contracts. In the course of the mandatory verification of transactions, no system damage should be possible in the future; at the same time, the risk of cybercriminals being able to steal funds is minimized. To get funds back, the involvement of the auditors involved is not required.
Ethereum should be a Role Model for Transaction Processing
The declared goal of the Istanbul hard fork was and is ultimately to declare war on the “congestion” in the system, which is often criticized. Dissatisfaction often arose because costs had sometimes risen drastically due to the high blockchain utilization. Ethereum now wants to say goodbye to these temporary problems. This primarily includes increasing the aforementioned transaction volume per second. ETH founder Vitalik Buterin, for example, has repeatedly criticized the fact that the blockchain has not yet reached the limits of its potential.
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