Ethereum developers have agreed to postpone the difficulty bomb, thus increasing inflation when most coins are trying to reduce it.
ETHEREUM DEVS DELAY DIFFICULTY BOMB AGAIN
The recent debate regarding Ethereum’s difficulty bomb is finally finished, with a rough consensus being reached. According to developers, the difficulty bomb will see yet another delay.
The details regarding what was said are a bit more difficult to acquire, as the public call between the developers experienced a number of technical issues. However, PegaSys’ Tim Beiko confirmed that the developers agreed to push the difficulty bomb by another 4 million blocks.
According to estimates, the issue of difficulty bomb will next emerge in about 700 days, meaning in about two years. In other words, the bomb will kick in once again in 2021/2022. On the other hand, the PoS Beacon Chain will go through significantly earlier, likely in spring 2020.
Meanwhile, the inflation will grow by 2,000 ETH per day by the time the fork occurs. At the moment, the number of ETH per day sits at around 11,600, meaning that it is expected to grow back to 13,600, which is about the same number that miners were seeing before the bomb kicked in.
POS AND POW HYBRID WILL COME BEFORE POS ITSELF
One thing to note is that developers did all of the decision making among themselves, without the participation of Ethereum’s community. One of the decisions included the proposed name of the fork, Melting Glacier. However, the name was eventually changed to Mountain Glacier.
However, once the PoS algorithm kicks in, it will remove the need for miners, while Ethereum itself would become much more environmentally friendly. Unfortunately, Ethereum’s founder, Vitalik Buterin, believes that PoS is still far away and that reaching it will likely take years.
Instead, the developers will introduce a hybrid of PoS and PoW, although the two types won’t be in direct contact with one another. The issue is undoubtedly very complex, and solving it is far from being a simple matter. Furthermore, the delay of difficulty bomb likely won’t have a good impact on the efforts to solve it, either.
WHAT HAPPENS NOW?
For now, the developers agreed to hold an urgent hard fork soon after the new Istanbul update, and the fork will take place in only a few days, on December 7th, on block 9,069,000. This is allegedly going to be the last hard fork that Ethereum 1.0 will ever experience, as it will open the way to Serenity, and eventually, Ethereum 2.0.
However, before the transition to Ethereum 2.0, the network will see a number of changes. This will include the activation of Casper, the alleged switch to PoS, the update to Ethereum virtual machine, as well as the change of cross-contact logic and protocol economics. On top of all that, in June 2020, Ethereum’s network is expected to get yet another update called Berlin, which will be the next step towards Ethereum 2.0.
Ethereum’s Volatility Is at Multi-Year Lows; Is a Massive Movement Imminent?
Ethereum and the aggregated crypto markets have been caught in a firm downtrend since early-November, and dwindling trading volume has resulted in ETH and other cryptocurrencies facing an ongoing period of sideways trading that has been frustrating for investors and traders alike.
This lack of volatility has especially impacted Ethereum, which is currently witnessing the lowest 60-day volatility levels seen since 2016, which may signal that a massive movement is imminent.
Ethereum Enters Tight Trading Range as Volume Dives
At the time of writing, Ethereum is trading down just under 1% at its current price of $144.55, which marks a slight decline from its daily highs of just over $146.
Over the past week, ETH has been ranging within the mid-$140 region, finding strong support at roughly $140 and strong resistance at $150.
This trading range has been growing tighter in recent times, as ETH has been stuck between roughly $142 and $145 for the past few days, and it is currently showing few signs of any major trend shift being imminent in the near-term.
This bout of sideways trading has come about concurrently with a major drop in Ethereum’s 60-day aggregated volatility, which is currently sitting at multi-year lows.
CoinMetrics, a blockchain research firm, spoke about this in a recent tweet, noting that th
It is highly probable that any near-term ETH movement will still remain somewhat dependent on Bitcoin, as BTC has been a strong guiding force over major altcoins in recent times.
Will Fundamental Strength Help Push ETH Higher?
Although it remains unclear as to whether or not Ethereum’s low volatility will result in a massive movement, growing fundamental strength could ultimately help propel the cryptocurrency higher.
Joseph Lubin, Ethereum’s co-founder and the founder of ConsenSys, spoke about Ethereum’s strength in a recent tweet, pointing to the massive amount of ETH currently locked DeFi initiatives as one reason why the blockchain is fundamentally strong.
“Over 20M total #Ethereum accounts were created in 2019. Over $650M USD is currently locked in #DeFi. Over 4.5M $ETH was issued this year from block rewards. The @ethereum machine just keeps chugging!” He explained.
While considering Ethereum’s low volatility and bullish fundamentals, it does appear that a bullish trend could be right around the corner.
Ethereum (ETH) Bulls Keep Ceding Ground, Price Remains Highly Vulnerable
Ethereum (ETH) bulls keep ceding ground. Now that the price has declined below the $150 mark, it seems unlikely that it will break past it anytime soon. The price keeps on losing ground printing lower highs and lower lows. The rising wedge on the 4H chart for ETH/USD has now been broken to the downside and the price has faced a rejection at the trend line resistance. Even if we see a near term move to the upside, Ethereum (ETH) will face rejection at the $147.65 level which is a very strong resistance. So, ETH/USD is expected to keep on declining further. If history repeats itself, we can expect it to decline again to the November, 2019 lows.
Despite any short-term bullishness, the price of Ethereum (ETH) faces some serious risks. There is a strong probability of a crash over the weekend that traders need to take into account. The price could easily decline down to the 61.8% which is not likely to hold. The area that has seen the most trading over the last 30 days and more is the $147-148 zone. That level will be extremely hard to breach now which is why we are more bearish than bullish on ETH/USD at the
Ethereum (ETH) is on the verge of a sharp decline against Bitcoin (BTC) as it has now faced multiple rejections at the 38.2% fib extension level. The VPVR indicator shows that the 38.2% also coincides with a frequent trading zone that has now become a strong resistance zone. Even if ETH/BTC ends up breaking higher, we are still likely to see it face rejection at the 200 EMA and then the 21,459 satoshi level.
The cryptocurrency market remains more vulnerable than ever. With the S&P 500 (SPX) keeping on making new all-time highs, the probability of some sort of a correction in the stock market has now increased. Even though the cryptocurrency market did not rally along with the stock market in the recent weeks, it is very likely to decline with the stock market if we see a correction towards the end of the year. We have seen sell-offs in the cryptocurrency market leading to Christmas and New Year which is why traders and investors might want to be very cautious being bullish on the market for now.
Ethereum 2.0 Won’t Be Released for ‘Potentially Many Years’
Ethereum is making progress, but the timeline for a full ETH 2.0 release is not coming any closer. According to a recent official blog post, we can expect “potentially many years before a full ‘Ethereum 2.0’ roll-out.”
With the recent Istanbul hard fork update, many in the Ethereum community were enthusiastic about Ethereum 2.0 coming soon. This enthusiasm, however, fails to grasp the complexity of the work the Ethereum developers are undertaking — and it’s going to take them a lot more time.
According to an overview of the most pressing problems confronting Ethereum developers, ETH 2.0 (called ‘Serenity’) is a long way away. The 1.x Files: a fast-sync, posted on the official Ethereum blog, reads that the team is now focusing on more incremental upgrades to Ethereum 1.x. Research is being broken up into smaller updates to ensure that the original chain remains operable during this transitionary period.
The task now is to prolong the “life of the chain for at least another 3-5 years, before a more dramatic upgrade to Serenity (ETH 2.0) arrives,” the post reads.
What’s The Hold-Up?
The reasons for this ‘delay’ are multi-faceted and complex.
In the blog post, Griffin Ichiba Hotchkiss writes of a few core issues currently slowing down developers due to the enormity of the problems. These issues include:
- chain storage
- block size and transaction throughput
- state size and network performance
The team is still actively researching solutions to these problems.
Altogether, migrating the existing ETH 1.x to Serenity is made more difficult by the fact that the original chain has to stay alive. If Ethereum started from scratch with Serenity, it would have been a simpler process. The need for incremental developments to ETH 1.x will slow down a
In short, we can expect a full ETH 2.0 to come out in “many years” — in “at least another 3-5 years,” according to the Ethereum blog post.
Albeit vague, that’s the current timeline.
Ethereum 2.0 ‘Phase 0’ Still Tentatively Scheduled for Q1 2020
Ethereum has largely shied away from giving concrete timelines, but many media outlets have reported on Q1 2020 being the tentative date for ‘phase zero’ of Ethereum 2.0.
Danny Ryan, a researcher at the Ethereum Foundation, told reporters in mid-November that this arbitrary date was said during a public call with the team and the media picked up on it. It’s unclear whether the latest Ethereum blog post disputes the team’s plans to release phase zero of Ethereum 2.0 in Q1 2020.
It should be noted that phase zero is not anything close to a full launch, but is merely the first step in a long process. This phase will allow staking and will introduce ‘ETH2’ for the first time, but this asset cannot be withdrawn or transferred during this step. All participants who decide to stake during phase zero will see their ETH1 burned in exchange for ETH2 — but it will be effectively be frozen until the next step.
Sharding, along with transactions, will come in the next phase. Judging from the recent technical issues posted on the Ethereum blog, however, we can likely expect sharding to be implemented sometime in 2021.
As BeInCrypto previously reported, the transition to ETH 2.0 will inevitably involve two Ethereum chains and cryptocurrencies to co-exist for a time. ETH 1.0 and 2.0 will have different prices and will both be trading on exchanges until a full version of ETH 2.0 is rolled out. This period will likely prove to be a pivotal moment for the world’s leading smart contract platform, as it must prove that its upgrade is feasible to the market and industry at large.