UPDATE: In light of recent security concerns, the team at Ethereum have announced a delay of the Constantinople hard fork event until these potential cybersecurity vulnerabilities can be resolved. More information can be found in their latest press release.
On January 16, 2019, the Ethereum network will undergo the much anticipated Constantinople upgrade (often referred to as a “hard fork”). This upgrade makes technical improvements to the existing Ethereum network and puts it on the path toward the larger Ethereum 2.0 upgrade in the future.
iComply has been monitoring the upgrade to ensure minimal impact to our users. We will support Constantinople in solidarity with the rest of the Ethereum community. Should there be any split, the tokens on the other network would be permanently locked up. Nevertheless, we will continue to monitor and test our systems against the new Ethereum network. We do not anticipate any issues for our clients or their investors.
What is Included in the Constantinople Hard Fork?
EIP 145: Bitwise Shifting Instructions
Expected to increase the execution of bitwise operations in smart contracts to be 10x cheaper. Bitwise shifts are a fast and simple action, and this change will enable them to be directly supported by the Ethereum Virtual Machine (EVM). The change is expected to significantly improve performance for simple mathematical functions such as addition, division, and multiplication meaning less resources (a.k.a. Ether, gas) are needed to process a transaction and less power is needed to mine the network.
EIP 1052: Smart Contract Verification
Previously, you had to pull the entire code of a smart contract to verify it. This took a lot of resources. This new verification feature enables you to pull just the hash of a different contract and verify that it is accurate. Over time this is expected to enhance both privacy and performance.
EIP 1014: CREATE2
This is a critical step towards enabling state channels in Ethereum and is expected to lay part of the foundation for a future Plasma upgrade. Similar to payment channels on the Bitcoin Lightning Network, a state channel is a technique for processing off-chain transactions while relying on the underlying Ethereum blockchain to ground its security.
EIP 1283: SSTORE
Reduces the gas cost for a specific operation, making it cheaper for multiple updates in one transaction to occur.
EIP 1234: Block Rewards & Difficulty Bomb Delay
The most debated issue of this hard fork was around this Ethereum Improvement Proposal (EIP) because if the incentives that it affects. The first is simple the reduction of a block reward from 3 to 2 ETH – this is a natural part of curbing inflation – classically, miners were mad about this. However, this change will not only reduce the costs to operate the network, it also shifts the compensation model of the network to better align the community with future scalability initiatives.
For full details on the upgrade, you can go here: https://blog.ethereum.org/2019/01/11/ethereum-constantinople-upgrade-announcement/
What does this mean for iComply users?
Not much. This release includes changes for Ethereum miners and improved developer tools. For Ethereum end users, nothing will change in the short term.
In the mid term, iComply will be researching several opportunities to use these new features for upgrades too both the Prefacto protocol and to the smart contracts, specifically those smart contracts with regulatory restrictions on secondary markets.
Over the long term, these changes are expected to help improve speed and scalability on the network as the community begins work.
What do I need to do?
No action is required on your part. All of your Ether and all of your existing tokens will be unaffected by this change.
What if I run into problems?
Should you experience any issues, or have any questions or concerns, please contact us.