Berlin, the next Ethereum hard fork will go live in April 2021. Laypeople will likely find it difficult to grasp the changes to be implemented by the hard fork. A hard fork is an upgrade that is not backward compatible. It requires all nodes on the network to upgrade to the latest version. This will create a permanent divergence from the previous version of a blockchain. This hard fork is intended to optimize the runaway gas fees and ship new measures for reducing possible Denial of Service (DoS) attacks.
What is Ethereum Berlin Hard Fork
Ethereum published specifications for the hard fork in January. The draft initially outlined 5 Ethereum Improvement Proposals (EIPs) but only four of them made it into the final version. The final four EIPs are EIP-2565 (Mode Gas Cost), EIP-2929 (Gas cost increases for state opcodes), and EIP-2930 (Optional access listed). The four EIPs seem rather cosmetic on the surface and difficult to understand, but they are important in Ethereum’s journey from Proof-of-Work (PoW) to Proof-of-Stake (PoS) consensus algorithm.
Each of the EIPs has a specific role to play that fits in the final objective of the Berlin upgrade.
- EIP-2565: It reduces the operational cost of the precompile.
- EIP-2929: Increases the gas costs
- EIP-2718: introduces a new transaction type
- EIP-2930: Mitigates some of the gas cost increases introduced EIP-2929
The Berlin upgrade was postponed several times due to a number of reasons such as centralization concerns because of its dependence on the Geth client.
It is worthwhile to note that Ethereum is on its way to Eth2.0, which is supposed to be the final and most desirable version of Ethereum. Of course, this does not mean that Ethereum will stop upgrading if it gets to this final iteration. In the meantime, Ethereum will undergo a series of non-backward compatible hard forks that slowly build-up to the final version of the blockchain. These upgrades are good for ERC20 based social tokens such as LEDU.
Non-reversible Protocol Upgrade
These non-reversible upgrades have an impact on miners and node operators. Node operators or miners have to upgrade to the latest version of the Ethereum client. Those who do not adhere to this requirement will be stuck with a non-compatible Ethereum version that follows the old rules instead of the new one. This means that they won’t be able to send or receive Ether on the upgraded Ethereum network.
Ether holders or miners do need to go take big steps like miners or node operators have to. Token holders who use exchanges, web wallet services, mobile wallets, or hardware wallets do not need to do anything specific unless their wallet provider or exchange requires them to do something. However, it is not always a good idea to keep one’s Ether on hot wallets – wallets connected to the internet – because of hacks and the potential to lose one’s money.
Ether holders may not understand the benefits of the Berlin hard fork as much as they may probably understand EIP-1559 as it is poised to make Ether a deflationary asset. Some may even be wondering why EIP-1559 has to wait a bit. It has to wait for its turn in the London hard fork. There was also a previous upgrade called Istanbul. This is not just a coincidence but a pattern of using city names.
After the Istanbul upgrade, Ethereum decided to use Devcon city names for the network’s upgrades. The next in line was Berlin and then London. The other city names to follow are Shanghai, Cancun, Prague, and Osaka.
Ethereum is on its way to becoming a PoS network. These upgrades are just temporary stops en-route to a final destination a couple of years from now. This destination has in part been inspired by its shortcomings. Ethereum co-founder Vitalik Buterin coined the term “blockchain trilemma,” referring to the blockchain’s inability to be secure, decentralized, and scalable at the same time. This is what Eth2.0 aims to solve when it fully ships. For now, the Berlin upgrade is like a brick being laid to a wall. The brick’s relevance and strength come when all the bricks are laid together. This is the same thing with the current upgrades. They will all have the greatest impact when the final version finally goes live.