Getting to Know the Ethereum Difficulty Bomb and Its Benefits and Risks
Rancakmedia.com – Get to know the term “difficulty bomb” used in the crypto world. “difficulty bomb” refers to a spike in the mining difficulty level. The time it takes to mine a new block on the blockchain increases or takes longer in this amount.
Not only that, some experts believe that the difficulty bomb indicates a future state in which mining will be difficult and unprofitable.
What is the Ethereum Difficulty Bomb and How Does it Work?
Ethereum difficulty bomb refers to the increasing difficulty of breaking cryptographic codes in mining algorithms that pay miners an amount of ETH for their work on the Ethereum blockchain.
There is a significant lag between block production on the Ethereum blockchain as code becomes more complex (and miners find it harder to earn ETH). As a result, the mining process will be slower and less profitable for miners.
Proof-of-Work (PoW) (which required miners to compete against each other to solve puzzles and earn rewards) is being phased out in favor of Proof-of-Stake (PoS), where rewards are allocated based on staking or coin ownership.
As part of Ethereum's Casper update, a switch between protocols is expected in late 2021. Then, during the update, a difficulty bomb will prohibit blockchain forking.
Reasons for the Presence of Ethereum Difficulty Bomb
The Ethereum difficulty bomb is meant to prevent miners from continuing to mine PoW after the blockchain transitions to PoS.
The Ethereum difficulty bomb was released as a result of a shift in the balance of power and wealth away from miners and towards investors and blockchain users.
It is possible that the Ethereum blockchain will fork if all miners do not switch to Proof-of-Stake. In 2017, Bitcoin miners engineered a fork in their blockchain, which would become the precursor to Bitcoin Cash (BCH).
When Will the Ethereum Difficulty Bomb be Released?
The Ethereum Difficulty Bomb was originally supposed to be released in late 2021, but has been delayed to June 2022. This forecast is very close to the Hard Fork London set's scheduled update to add EIP-3238. The difficulty bomb will be delayed to Q2 2022 due to a hard fork.
The Beiko team, on the other hand, chose to deploy EIP-3554 in May 2021, according to Ethereum developers. EIP-3554 is part of the Ethereum upgrade proposal. This proposal attempts to slow down the ETH mining process while also reducing the difficulty bombs that occur during mining operations.
Due to the London Hard Fork upgrade, the difficulty bomb was postponed until the staking blockchain technology was completed. Today, Team Beiko and James Hancock released on EIP-4345, a new Ethereum Improvement Proposal (EIP).
Later, until June 2022, this EIP-4345 will be used to delay and slow down difficulty bombs. This delay is expected to allow for a difficulty bomb after the merger, which is a key phase in the launch of Ethereum 2.0.