Crypto Firms Divided Over Proposed PoW Ethereum Forks

Ethereum merger is giving rise to factions within the community as there are many opinions about the direction of a potential fork.

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

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

Proceed with caution

A fork was predicted by hedge fund Galois Capital, whose founder and CEO Kevin Zhou predicted the collapse of the TerraUSD stablecoin.

One initiative, EthereumPOW, is led by a semi-retired Chinese miner Hongcai Guo, who has received requests from Chinese companies to begin efforts on the fork. Guo has claimed that people will get free money if the split takes place. About 60 developers are working on the fork to eliminate the so-called difficulty bomb in the existing Ethereum code.

The difficulty bomb is designed to make Ethereum mining nearly impossible as the transition approaches. Ethereum developers announced a bomb deferral in early June.

proceed carefully, say analysts. They say that a fork is often plagued by a lack of involvement from application developers and users.

An executive at analytics firm Messari says the efforts so far have been nearsighted at best, focusing only on a possible new token without thinking about how the new network will be supported in the long run.

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

Companies weigh in, opinions divided

Institutional Miner Hive Blockchain Technologies Ltd. said it could return to mining Ethereum Classic, the predecessor to the current Ethereum network. An employee of Flexpool, a company that enables smaller miners to mine Ethereum, said the company would support whatever the money makes. He added that a new fork will likely need the backing of a famous entity to succeed, as cryptocurrencies and tokens have little intrinsic value outside of speculation.

Taylor Monahan, head of product at Metamask, a company that makes an eponymous non-custodial crypto wallet, said the fork would happen if it’s lucrative for an entity. Metamask had 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 Tron blockchain who recently released a stablecoin, said his cryptocurrency exchange Poloniex would support all Ethereum proof-of-work tokens.

Buterin added that he doesn’t believe forks will promote adoption in the long run. Future development, he says, will need to strengthen Ethereum’s cryptographic underpinnings to fend off the threats posed by quantum computing.

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