Ethereum merge is giving rise to factions within the community as opinions abound regarding the direction of a potential fork.
One group, spearheaded by a Chinese miner, proposes a fork to preserve the current consensus mechanism known as proof-of-work. A fork is a substantial change to the software of a blockchain network that makes previous transactions or blocks of transactions valid or vice-versa.
The merge, slated for Sep. or Oct. this year, will change the consensus layer of the Ethereum protocol from the energy-guzzling proof-of-work to proof-of-stake, which some claim will reduce Ethereum’s energy footprint by 99%.
Proceed with caution
A fork was predicted by hedge fund Galois Capital, whose founder and CEO Kevin Zhou predicted the collapse of the TerraUSD stablecoin.
One initiative, EthereumPOW, is being led by a semi-retired Chinese miner Hongcai Guo, who has received requests from Chinese companies to commence efforts on the fork. Guo has claimed that people will get free money when the fork happens. About 60 developers are working on the fork to eliminate the so-called difficulty bomb in the existing Ethereum code.
The difficulty bomb is designed to make Ethereum mining almost impossible as the transition draws near. Ethereum developers announced a delay of the bomb in early June.
Proceed with caution, say analysts. They say that a fork is often plagued by a lack of application developer engagement and users.
A manager at analytics firm Messari says efforts thus far have been myopic at best, focusing only on a potential new token without considering how the new network will be supported in the long run.
Companies weigh in, divided opinions
Institutional miner Hive Blockchain Technologies Ltd. said it might revert to mining Ethereum Classic, the predecessor of the current Ethereum network. An employee of Flexpool, a company enabling smaller miners to mine Ethereum, said that the company would support that which makes it money. He added that a new fork would likely need a famous entity’s backing to succeed since crypto coins and tokens have little intrinsic value beyond speculation.
Taylor Monahan, head of product at Metamask, a company that makes an eponymous non-custodial crypto wallet, said that the fork would happen if it is lucrative for some entity. Metamask had initially said it would not support Ethereum Classic when Ethereum was forked in 2016 but soon changed its mind.
Justin Sun, the controversial entrepreneur behind the Tron blockchain that released a stablecoin recently, said that his cryptocurrency exchange Poloniex would support all Ethereum proof-of-work tokens.
Buterin added that he does not believe forks will foster long-term adoption. Future development, he believes, will have to strengthen the cryptographic underpinning of Ethereum to ward off the threats presented by quantum computers.