Ethereum
What is Ethereum’s ‘Difficulty Bomb’?
Ethereum’s “difficulty bomb” refers to the increasing level of difficulty of puzzles in the mining algorithm used to reward miners with ether on its blockchain. As puzzles become more complex (and miners find it harder to earn ether), there will be a substantial lag between the production of blocks on the Ethereum blockchain. This will slow it down exponentially and its economy will become less attractive to miners. The beginning of this scenario is called the “Ethereum Ice Age.” During this period, Ethereum will go from Proof of work (PoW), which requires miners to earn ether by competing with each other to solve puzzles and earn rewards, to Proof of Stake (PoS), where rewards are distributed based on staking or coin ownership. The switch between protocols will take place later this year as part of the Casper upgrade on Ethereum. The difficulty bomb will prevent the Ethereum blockchain from forking during this time.
Why was the difficulty bomb introduced?
Ethereum’s difficulty bomb is a disincentive for miners to continue with proof-of-work even after the blockchain transitions to proof-of-stake. Their main reason for doing so may be the shift in the balance of power and profits from miners to investors and blockchain users. If not all miners switch to proof-of-stake, then there is a risk of a fork of the Ethereum blockchain. A similar situation occurred in 2017, when bitcoin miners forced a fork of its blockchain by supporting Bitcoin Cash. (See also: Bitcoin Vs. Bitcoin Cash: What’s the Difference?Ethereum’s founders, however, anticipated such an eventuality and programmed their blockchain to incorporate increases in difficulty levels for its mining algorithm.
Difficulty Bomb Evolution
Difficulty levels on the Ethereum blockchain began increasing in November 2016, starting at block 200,000. “At that point (right around the release of the Serenity milestone), we will see a significant increase in difficulty, which will begin to increase block solving times,” declared Stephen Tual, Ethereum’s chief commercial officer, in an August 2015 blog post. Serenity is the latest step in Ethereum’s evolution after Metropolis, its current phase that began in October of last year. No specific date has been set for Serenity’s release.
An initial timeline suggested that a slowdown of the Ethereum blockchain would occur in less than a month. However, subsequent delays in the release of Ethereum’s code have pushed back the final release date even further. This has also delayed Ethereum’s transition from PoW to PoS. According to an earlier estimate by Ethereum co-founder Vitalik Buterin, the “final calamity” in terms of significant delays between blocks will occur in 2021.
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