February 6, 2023

The Ethereum consolidation is creating factions within the community where opinions abound about the direction of the possible split.

One group, led by a Chinese miner, is proposing a fork to maintain the current consensus mechanism known as proof-of-work. A fork is a fundamental change in the software of the blockchain network that makes previous transactions or blocks of transactions valid, or vice versa.

The merger, scheduled for September or October of this year, will change the consensus layer of the Ethereum protocol from power-intensive Proof of Work to Proof of Stake, which some claim will reduce the power footprint of Ethereum by 99%.

Advance with caution

The collapse of the TerraUSD stablecoin has been predicted by the hedge fund Galois Capital, whose founder and CEO Kevin Chu has predicted a split.

One initiative, EthereumPOW, led by semi-retired Chinese miner Hongcai Guo, has received requests from Chinese companies to begin efforts at the crossroads. Guo claimed that people would get free money when the fork occurred. About 60 developers are working at the crossroads to remove the so-called difficulty bomb in the current Ethereum code.

The difficulty bomb is designed to make mining Ethereum almost impossible as the transition approaches. The developers of Ethereum announced the delay of the bombshell in early June.

proceed with caution, Say Analysts. They say the split often suffers from a lack of participation by app developers and users.

A director at analytics firm Messari says efforts so far have been shortsighted at best, focusing only on potential new code without considering how to support the new network in the long term.

But Ethereum co-founder Vitalik Buterin said on Saturday that he does not expect any forks to significantly harm the Ethereum network.

Companies distribute opinions, divide opinions

Institutional mining company Hive Blockchain Technologies Ltd. It could go back to mining Ethereum Classic, the predecessor of the current Ethereum network. An employee of Flexpool, a company that enables smaller miners to mine Ethereum, said the company will support what generates money. He added that the new fork will likely need the backing of a popular entity to succeed because cryptocurrencies and tokens have little intrinsic value beyond speculation.

Taylor Monahan, chief product officer of Metamask, a company that makes an unrestricted crypto wallet, said a fork would occur if it was profitable for an entity. Metamask 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 recently released stablecoin Tron blockchain, said crypto exchange Poloniex will support all Ethereum Proof of Work tokens.

Buterin added that he does not believe the forks will promote adoption in the long term. He believes that future development will have to strengthen the cryptographic foundation of Ethereum to fend off threats presented by quantum computers.

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