The leading cryptocurrency exchange will support the Constantinople hard fork scheduled later this month.
One of the largest cryptocurrency exchanges in the world, Binance, announced earlier on Thursday its support for the upcoming Ethereum (ETH) hard fork named Constantinople.
The upgrade is based on five separate Ethereum Improvement Proposals (EIPs) and aims to transition the consensus mechanism from a proof-of-work to a proof-of-stake algorithm.
Binance is geared up to address all the technical requirements to be able to handle the upgrade. The fork, which is scheduled to occur at a block height of 7,080,000, should fall between January 14th and 18th.
Details of the Hard Fork
The improvements that will go into the Constantinople hard fork are going to be backward incompatible. All the nodes running the Ethereum protocol will need to carry out the upgrade together.
The hard fork is anticipated to bring improvements to network efficiency and fee structure. The upgrade will also implement the scaling roadmap for the blockchain.
The decision to go ahead with the upgrade was taken on Friday, December 7th, at the bi-weekly developers meeting. A consensus issue that cropped up during the upgrade testing on the Ropsten testnet last October had delayed the decision.
Change in the Consensus Algorithm
With the current proof-of-work mechanism, the Ethereum blockchain consumes massive amounts of power to fuel the mining machines that perform complex calculations to earn block rewards.
One of the improvement proposals was initially intended to move to a more environmentally-friendly consensus algorithm named Casper. However, the current upgrade will only take a step towards that direction by delaying the difficulty bomb by 12 months and reducing the rewards per block from 3 ETH to 2 ETH per block.
The difficulty bomb is a piece of code that, due to the incremental increase in block mining difficulty, would activate an Ethereum “Ice Age,” a state in which new block creation on the network comes to a complete halt.
This aspect of the upgrade had ruffled feathers within the miner community due to the reduction in the block rewards which essentially would mean that they get paid less.
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Images courtesy of Adobe Stock, Shutterstock, and Binance.