June 5, 2023

As opinions abound about the direction of a potential fork, the Ethereum merger is causing factions within the community.

A group led by Chinese miners has proposed a fork to preserve the current consensus mechanism known as proof-of-work. A fork is a major change to a blockchain network software that makes a previous transaction or block of transactions valid and vice versa.

The merger planned for this September or October will change the consensus layer of the ethereum protocol from energy-hungry proof-of-work to proof-of-stake, which some claim will reduce ethereum’s energy footprint by 99%.

proceed with caution

Hedge fund Galois Capital predicted the fork, and its founder and CEO Kevin Zhou predicted the collapse of the TerraUSD stablecoin.

An initiative called EthereumPOW is led by Guo Hongcai, a semi-retired Chinese miner who has received requests from Chinese companies to start working on the fork. Guo claimed that when the fork happened, people would get free funds. About 60 developers are working on a fork to remove the so-called difficulty bomb in the existing ethereum code.

The difficulty bomb is designed to make Ethereum mining nearly impossible as the transition looms. The Ethereum developers announced in early June that the bomb was delayed.

proceed cautiously, Say analyst. They say forks are often plagued by a lack of app developer engagement and users.

A manager at analytics firm Messari said efforts to date have been shortsighted at best, focusing only on potential new tokens without considering how to support the new network in the long run.

But ethereum co-founder Vitalik Buterin said Saturday that he does not expect any fork to cause significant damage to the ethereum network.

Companies weigh in, disagreements

Institutional miner Hive Blockchain Technologies Ltd. said it may resume mining Ethereum Classic, the precursor to the current Ethereum network. An employee of Flexpool, a company that enables small miners to mine ethereum, said it will support companies that can make money. He added that a new fork may require the backing of a prominent entity to succeed, as crypto coins and tokens have little intrinsic value other than speculation.

Taylor Monahan, head of product at Metamask, the company that makes the eponymous noncustodial crypto wallet, said a fork would happen if it was profitable for certain entities. Metamask initially said it would not support Ethereum Classic when it forked in 2016, but quickly changed its mind.

Justin Sun, the controversial entrepreneur behind the Tron blockchain that recently released the stablecoin, said that his cryptocurrency exchange Poloniex will support all Ethereum proof-of-work tokens.

Buterin added that he does not believe the fork will foster long-term adoption. He believes that future developments will have to strengthen Ethereum’s cryptographic foundation to withstand the threats posed by quantum computers.

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