A few days before the eight network upgrade, Istanbul, Ethereum (ETH) price is down by 21% in a month. In comparison, the price jumped almost 30% in a month before the previous upgrade, Constantinople, that occurred on February 28.
Back then, ETH increased even more than Bitcoin (BTC) (+12%). This time, both two largest coins by market capitalization, dropped by c. 21%.
At pixel time (14:07 UTC), ETH trades at c. USD 151, and is up by 2% in the past 24 hours and by 1.2% in a week.
ETH price chart ahead of the Constantinople upgrade
ETH price chart ahead of the Istanbul upgrade
After the Constantinople upgrade, ETH remained relatively stable for a month, before the crypto market rally started in April.
“[Istanbul] is a rather minor upgrade on the roadmap to Ethereum 2.0 and is meant to improve security, network costs, and interoperability with other blockchains. Hopefully, end users will never even need to be aware of the change and only those who are running nodes will need to upgrade,” Mati Greenspan, Founder of QuantumEconomics.io, said in his daily newsletter today.
According to him, as long as Ethereum retains it’s dominance and continues to develop the network for scalability, the value of the tokens should rise, especially as inflation falls.
The upgrade is planned for this weekend, and block number 9,069,000, according to the Ethereum Foundation. It comes after upgrades such as the aforementioned Constantinople, Spurious Dragon, and Byzantium, and before the first phase of the major protocol change, Serenity, planned for 2020. It is otherwise known as the much-talked-about Ethereum 2.0, a new blockchain as explained by co-founder Vitalik Buterin in his 2018 Devcon speech. Further down the line as a part of Serenity, Ethereum is planned to go from the Proof of Work (PoW) consensus algorithm, used also by Bitcoin (BTC), to Proof of Stake (PoS).
That said, even if not a direct part of Serenity, there’s obviously a lot at stake for this second hard fork as it’s a part of the path towards the network’s much anticipated second iteration. As previously reported, when it comes to issues, in an August interview Buterin said that usability, account security and privacy are improving, but that scalability is “a big bottleneck because the Ethereum blockchain is almost full.” The upcoming upgrades are meant to increase scalability and decrease transaction and smart contract costs.
As the other upgrades, Istanbul will change the underlying Ethereum protocol and create new rules to improve the system. Changes that are implemented in Istanbul are defined using Ethereum Improvement Proposals (EIPs). From more than 30 EIPs proposed, 6 were chosen to be implemented as a part of the upgrade:
- EIP 1679: Istanbul Meta, which will make layer 2 solutions based on SNARKs and STARKs more performant, and enable Ethereum and Zcash (ZEC) to interoperate, among other things;
- EIP-152, which will enable a relay and atomic-swap transactions between Zcash and Ethereum;
- EIP-1108 will make zk-SNARKs cheaper, thus enabling cheaper scaling and privacy applications to be built;
- EIP-1344 adds a way for contracts to keep track of the Ethereum chain they are on;
- EIP-1884 changes the cost of certain EVM (Ethereum Virtual Machine) opcodes to prevent spamming attacks and to better balance the amount of computation in each block;
- EIP-2028 makes zk-SNARKs and zk-STARKs cheaper by reducing the cost of calling data within transactions;
- EIP-2200 changes the cost calculation of storage in the EVM and enables contracts to introduce new functions.
Node operators and miners need to prepare for the update. Any nodes that have not been upgraded will be left on the old chain and will not be able to operate or transact on the new one. Exchanges and wallets need do nothing.
The majority of the node operators are yet to upgrade – 59% of them. 60% of Geth and 55% of Parity node operators have not declared themselves as ready at the time of writing either. Half of the listed mining pools have confirmed to be ready for the upgrade. Bitso is the only one among exchanges listed as ready, though a majority of listed infrastructure provider have upgraded.
Furthermore, prior to the Ethereum mainnet upgrade, testnets must be upgraded. One of these is the Kovan testnet which tweeted back in October that “Istanbul hard fork [is] successfully activated on Kovan.” It’s also live on the Ropsten, Rinkeby, and Gorli testnets.