It may have been panic selling – or profit taking – which has so far driven the ETH price down by 16%. It might have also been anxiety surrounding Constantinople – expected to take place sometime early next week. Investors get nervous when projects talk about hard forks. No surprises there: everyone’s still reeling from the stormy Bitcoin Cash (BCH) fork from a few months back.
Whatever’s done it, Mr. Buterin has started mulling over his use of terminology. ETH holders may not understand what’s about to happen. Connotations surrounding the term ‘fork’ are creating several misunderstandings. He’s tipped his hat to the chaps at Zcash for their canny marketing skills. In a tweet last night, Buterin complemented Zcash for calling a ‘fork’, a ‘network upgrade’ instead.
IMO the Ethereum community should consider adopting @zcashco's terminology of calling things like Constantinople "network upgrades" and reserve "fork" for splits that leave 2+ viable chains. Too many people asking me lately where they can dump their non-Constantinople coins…
— Vitalik Non-giver of Ether (@VitalikButerin) January 10, 2019
Ethereum Roadmap Says Serenity Ahead
But Buterin doesn’t want to just port Zcash’s apt phraseology over to Ethereum. He’s also looking to take a few pointers on how best to scale the network.
Everyone knows Ethereum – which uses the good old fashioned Proof of Work (PoW) consensus – has a poor record when it comes to scalability. Rival blockchain platform EOS can process thousands of transactions per second (TPS), using a delegated Proof-of-Stake (dPoS) method; Ethereum can handle 15. ETH has become effectively unusable – high transaction fees and long confirmation times – during periods of high throughput; the Crypto Kitties fiasco in December 2017 and FCoin in the summer clogged the network completely.
Although zk-SNARKs is mostly known for facilitating private transactions on Zcash, Buterin hopes it can also be used to improve scalability on Ethereum; it will be integrated into the network in the Constantinople upgrade next week. He said way back in February 2017 that zk-SNARK support would be a “key feature” on the roadmap. In September he said the algorithm could scale the network to 500 TPS.
And there are layer 2’s without data availability tradeoffs or liveness requirements, eg. tx mass-validation via ZK-SNARKs can reduce costs to < 1000 gas per tx if done well. That’s ~500 tx/sec on-chain with all the security guarantees of on-chain.
— Vitalik Non-giver of Ether (@VitalikButerin) September 22, 2018
ETH the new ZEC?
The week’s 16% declines – the crypto wipeout – have all but erased ETH’s 2019 gains. But that’s the old Ethereum. The transformation into an improved Ethereum is only days away with Constantinople.
There may be no new chain coming from the Constantinople upgrade; but make no mistake, Ethereum is reinventing itself. And the sooner that the market recognizes this transformation, the sooner the price can get out of the doldrums and trade with some stability that has been lacking.
The author is invested in digital assets, including Zcash which is mentioned in this article.