If you’re a cryptocurrency enthusiast chances are you have already heard about Byzantium, the forthcoming update to the Ethereum network. From what we know, it will be released on or around October 16th on block 4,370,000, bringing along a number of changes. Here we want to present you with top 5 things you should know about Byzantium. Let’s roll…
1. Byzantium is the first part of Metropolis
Even though it is an important update, Byzantium is actually the first half of a much larger upgrade, called Metropolis, designed to enhance the usability of the platform. Nonetheless, Byzantium will be the first major technical upgrade since the network has been valued in the billions. So yes, it is tremendously important. (related: Ethereum Metropolis Hard Fork)
2. Byzantium adds privacy features
Privacy takes a central stage in the Byzantium update, with the Ethereum’s team working together with the privacy-centric currency ZCash on zkSNARK. This in turn could make it possible for Ethereum users to make their transactions more private. (related: 6 Things Everyone Should Know About Zcash)
By using zkSNARK, a statement can be verified without requiring any information to be revealed beyond its validity. The underlying technology translates what you want to prove into an equivalent form — without anyone knowing the solution to the algebraic equations that produced it.
3. Byzantium (slightly) changes rewards for miners
Byzantium will also reduce Ethereum issuance to miners through block rewards from the current 5 to 3 eth, while delaying the increase in mining difficulty which was placed there for the Proof of Stake (PoS) upgrade.
PoS is delayed, so to keep issuance around the same level as it would have been had difficulty not been delayed, they are suggesting a reduction. This reduction usually has the effect of increasing price if demand remains stable due to reduced supply as we have seen from the bitcoin experience.
It, therefore, might make no difference as far as miners are concerned. But inflation will be reduced, so holders may keep or receive more of the proportionate value.
4. There won’t be a new currency after this hard fork
A hard fork is a software upgrade that introduces a new rule to the network that isn’t compatible with the older software, so miners will need to switch over to the new upgraded version of Ethereum. As such, a hard fork does not guarantee a new currency unless a substantial amount of miners continue to mine the old blockchain.
There is a large consensus about the Byzantium hard fork, and we don’t expect to see the new cryptocurrency emerging after it has been deployed. This isn’t the Ethereum Classic vs Ethereum situation; quite the contrary, the entire Metropolis update has been planned for quite some time, there’s no big controversy around it, and not enough for miners to keep mining the old chain and split from the Ethereum blockchain.
5. Ether will likely appreciate in value ahead of Byzantium
You know how new things get to excite people? Well, we — and many other media following cryptocurrencies — expect to see ether appreciating in value in the days before the Byzantium hard fork takes place. Chances are it will stabilize a few days after the fork, but in the meantime, it could be useful to get into game. We can’t offer you an investment advice, but you can see where this is heading.
We are glad to see Ethereum taking major steps into the future; now we can’t wait for the second part of the Metropolis update, named Constantinople. Patience was never my virtue. 😉