On 27th July, Ethereum developers announced that the new Ethereum hard fork, Constantinople will be released sometime during the second week of October. The announcement was made during a developer and stakeholder meet that addressed the issues in the blockchain and cryptocurrency industry with a focus on further upgrades.
The developers also revealed that the test code for the hard fork is being run multiple times by the Foundation and that the key objective is to make sure the transition occurs smoothly. The Ethereum team has also stated that the hard fork will be created to usher in a new age of blockchain network usage. The developers have also said that they are going to make the Mainnet less expensive and much more efficient to use.
The officials of the Ethereum foundation have revealed that:
“Some of the updates that have reached the implementation phase include EIP 210, which reorganizes the way block hashes are stored in Ethereum, and EIP 145, which increases the speed of arithmetic in the Ethereum virtual machine (EVM). “
The team has also announced that there are two more updates in the pipeline: one that will add Ethereum status channels and the other that will change the way smart contracts interact with one another.
The Constantinople hard fork will be the second in a series of upgrades that was kickstarted with the release of Byzantium which went live in October 2017. Byzantium went live at block 4,370000 of the Ethereum blockchain and consisted of nine Ethereum Improvement Protocols [EIPs]. The goal of this release was to improve the Ethereum network’s privacy, scalability, and the security protocols.
The following are the main features of the Byzantium hard fork:
The developers at the conference have gone ahead and stated that they are trying to avoid a controversy like the one that led to the Ethereum Classic hard fork back in 2016. The reason for the hard fork was that a part of the Ethereum community was unhappy with security measures of the network, which occurred after the $50 million Ethereum network hack.
Ether’s price remains in an uptrend against the US dollar. ETH/USD is likely to move higher as long as it is above $445.00.
Ether’s price faced strong resistance near $515.00 and declined against the US dollar.
ETH/USD is following a crucial ascending channel with support at $445.00 on the 12-hour chart.
ETH/BTC started a recovery and moved above the 0.0620BTC resistance.Technically, the 12-hour chart indicators are showing a few positive signs in the bearish territory.
Ether Price Weekly AnalysisAfter a significant upward move, ETH/USD faced strong resistance near $515.00. A new monthly high was formed at $515.09 and the price declined sharply below the $480.00 pivot level.
More importantly, there was a lot of bearish pressure on ETH/BTC as the pair declined below the 0.0650BTC support area. It traded close to the 0.0600BTC support and is currently recovering above the 0.0620BTC resistance
Let’s start with the 12-hour chart of ETH/USD to understand why Ether is still in an uptrend above the $445.00 support. The chart indicates that the recent rejection was near an ascending channel resistance at $515.00.
The pair dropped heavily and even broke the $450.00 support. However, losses were protected by the same ascending channel, with current support at $445.00. Ether’s price is currently recovering and is trading above the $450.00 level.
To the topside, there are many hurdles for buyers, starting with the $468.00 level and the 38.2 Fibonacci retracement level of the drop from $515.09 to $440.85. Looking at the 2-hour chart of ETH/USD, the pair broke a declining channel with resistance at $455.00.
Should the price break the $468.00 resistance, the next barrier for Ether buyers awaits at $480.00 (the previous support). Above this, the price will most likely surge higher toward $500.00 and $515.00. Above the latter, the next hurdle is the channel resistance at $525.00.
On the other hand, a failure to gain momentum above $468.00 and $480.00 could result in a downward move toward the channel support at $445.00.
Overall, Ether will most likely move higher as long as it is above $445.00. If it drops below this, the price may revisit the $425.00 support in the near term.
Weekly Resistance Levels$468.00 and $480.00Weekly Support Levels$445.00 and $425.0012-hour RSIThe RSI is moving higher toward the 45 level.12-hour MACDThe MACD is slowly moving into the bullish zone.
Ethereum is in the midst of a "gas crisis."
At least, that's according to Taylor Monahan, CEO of MyCrypto, who took to Twitter this week to remind users of best practices for setting transaction fees when using the world's second-largest blockchain. The words of concern are warranted – because of changing conditions on the network, there's a possibility users of the startup's wallet software are overpaying for transactions.
In total, ethereum users spent 5,862 ether, or $2.7 million, to send transactions on Monday, an all-time high according to available network data. The culprit? A single exchange, China-based FCoin, appears to be congesting the blockchain with a controversial business model.
"It's [good to remember] what gas actually is, how it works, and why it's necessary… and why this situation is unnecessary," Monahan tweeted.
A measure of computational effort, the price of gas (effectively what users pay to use the network) fluctuates according to demand. And that demand appears to be escalating to unprecedented levels. While December saw a popular digital cat breeding game CryptoKitties overwhelm the network, cumulative gas expenses at that time were less than half of this week's new heights.
"Gas prices not looking good right now," warned Eth Gas Station, a primary resource for ether gas metrics, on Twitter Monday, stating that users should pay $3.20 for a transaction to be accepted, or wait for periods of 30 minutes for that transaction to be accepted into a block.
The situation has since corrected – transaction fees, while still high, have settled relative to Monday's peaks – but still, developers are exploring ways to ensure that volatility is improved.
"The problem is what is causing these fees to go up and how that affects to the usability of the blockchain in a broader sense," Monahan told CoinDesk.
And what's because, while transaction costs point to a wider scaling issue (as the network reaches its limits, transaction fees increase) there's steps that can be taken to improve costs before ethereum moves into a more scalable architecture.
For example, Monahan said it's due to imperfect tooling, like gas pricing algorithms that occasionally go awry, and human error on behalf users accounts for much of the price rise.
"The fees are very high due to a few events over the past few days that have increased demand [and] a few parties who have external factors that make paying exorbitant transaction fees worthwhile."
Gas attacksOne such actor, according to Monahan, is FCoin.
A China-based exchange, FCoin has previously drawn attention due to its novel revenue model, which involves distributing free tokens to users trading on the platform. As detailed by CoinDesk, the model has proved popular, having led the exchange to 24 trading highs of $5.6 billion last month, a figure that vastly exceeded the top exchanges on CoinMarketCap combined.
Behind the ethereum congestion however is that currently, FCoin is running a daily competition, whereby users vote for a token listing by depositing that token – repeatedly – onto the exchange.
As a result, it spurred token developers to send out airdrops to a multitude of accounts, sparking hundreds of thousands of transactions, a gesture that for many in the ethereum community was not well received.
"$240,000 burned in gas so far," founder of Fresco, Roy Huang, tweeted on Monday, "If you want this madness, you are in blockchain for wrong reason."
Speaking to CoinDesk, Monahan echoed this sentiment, calling it an "absolutely despicable voting mechanism," that was incentivizing Sybil attacks, a kind of spam attack that swarms a network with false identities.
Sparked in times of network congestion, the result is what ethereum researcher Philippe Castonguay calls a "gas price war," in which users battle for network inclusion by bidding higher fees.
The impact of this is numerous: transactions fees increase, transactions fail due to inefficient fees, and others, out of frustration or accident, send enormously high transaction fees- which drives up the price for everyone else.
It even causes advanced users to collude with miners to skip the transaction fee, Monahan said.
Network fixesBut regardless of the actions of FCoin, developers are emphasizing that there's ways to improve the situation for all users, irrespective of whether that usage is condemned.
"On the recent high gas fees I have to disagree with criticism regarding 'spam transactions,'" Georgios Konstantopoulos from Loom Network tweeted, "We're in a permissionless network. There are no spam transactions. If somebody pays the required fee, the [transaction] is not spam."
As such, there's work being done that can improve the situation, in both the short and long term.
For example, Griff Green has authored a proposal based on research by Alexey Akhunov, in which ethereum adopts a technique inspired by bitcoin, named the "child pays the parent" strategy.
Rather than transactions by the same account being processed separately, miners can sort transactions according to account, and claim a higher bounty by processing them simultaneously, which could be useful for "super users," like exchanges, that send multiple transactions at once.
"Right now the miner is just leaving money on the table," Green told CoinDesk.
Founder of ethereum, Vitalik Buterin, has also authored a proposal, that simplifies the gas pricing algorithm, making it easier to predict what the correct gas price should be.
Down the line, such a simplified algorithm could eliminate the errors of the gas pricing market today. But while it has been broadly well received, it would require all users to upgrade the software.
"It definitely attacks the heart of the problem, but I would be surprised to see this implemented before the end of 2018," Green told CoinDesk.
On the other hand, Green's proposal, that could have a "strong impact on the network," according to Green, only requires the code to be implemented by miners, and wouldn't require a hard fork to improve efficiency.
Green told CoinDesk:
"It effectively adds a feedback loop that can help everyone prioritize transactions effectively."
Bigger pictureHowever, speaking to CoinDesk, Afri Schoedon, a communications manager at Parity, said that underlying the conversation is the bigger issue of scaling ethereum to keep up with user demand.
"In general the gas price market is a good thing, in theory, but in reality clients are at the limit what they can process," Schoedon told CoinDesk.
Castonguay, who is responsible for a short term scaling-measure named GasToken Factory that allows users to profit from cleaning unnecessary data from the blockchain, agreed that scaling was the underlying concern.
"The recent gas price surges are really only a reflection that the ethereum blockchain has been close to its maximum throughput for a while," Castonguay said, "It reflects that people have been using the protocol consistently and that ethereum needs to scale."
That said, scaling solutions, such as sharding, are far-reaching, experimental technologies, and the timeline for their completion is still unknown.
"This is cutting-edge research," ethereum developer Nick Johnson, responding to a disgruntled user, wrote on Reddit, "Nobody else has solved it either. Give it time."
Yet both a scaling and an optimization problem, speaking to CoinDesk, Monahan emphasized that this widens the pool of those capable of assisting in network improvements.
"We all have a role to play in building the future," Monahan said, concluding:
"We should all try to take part in discussions, provide feedback on the tools we are using, and be active participants in this future. The best world is one where we are all working together."
Rachel Rose O'Leary
A top executive at the first US exchange to list bitcoin futures contracts said that the Securities and Exchange Commission’s statement that ether will not be regulated as a security will help pave the way for exchanges to list ethereum futures.
CBOE Global Markets President Chris Concannon made this comment in a statement quoted by Bloomberg, predicting that this regulatory clarity will make the Commodity Futures Trading Commission (CFTC) more likely to approve the listing of ethereum futures, a product that would provide investors with exposure to ether’s price movements without custodial risk.
“We are pleased with the SEC’s decision to provide clarity with respect to current Ether transactions,” Concannon said. “This announcement clears a key stumbling block for Ether futures, the case for which we’ve been considering since we launched the first Bitcoin futures in December 2017.”
As CCN reported, SEC Director William Hinman revealed on Thursday that the agency did not intend to regulate ether — the native asset of the Ethereum network — as a security.
Hinman, who heads the SEC’s division of corporate finance, said that, despite how ether was originally issued, the asset has become sufficiently decentralized that it no longer bears the hallmarks of a security.
“And putting aside the fundraising that accompanied the creation of Ether, based on my understanding of the present state of Ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions.”
In December, CBOE and fellow Chicago exchange CME listed bitcoin futures, and both have hinted a desire to list more cryptocurrency derivatives products. However, regulatory uncertainty surrounding the status of other cryptoassets has slowed this process.
Earlier this year, CME partnered with a group of cryptocurrency exchanges to create a real-time ethereum price index and benchmark. The move was widely viewed as a stepping stone toward the eventual launch of an ethereum futures product, and the exchange operator confirmed that it was gauging client interest in eventually creating a market for this product.