Deciphering Difficulty Bomb In Ethereum Mining

Is the Difficulty Bomb upgrade in Ethereum necessary?

Ethereum is the second-largest decentralized app on the blockchain network.

Ethereum developers have continued to launch and introduce several upgrades. One of those upgrades is the Difficulty Bomb.

The Difficulty Bomb upgrade comes with the Ethereum version 2.0. The latest version of ETH 2.0 is expected to operate alongside the current version, and after a while, it will go extinct.

The upgrade will see the switch from the Proof of Work protocol to the Proof of Stake protocol.

The Difficulty Bomb is one of the mechanisms that will intentionally force miners to scrap the old version of Ethereum.

Difficulty Bomb will intentionally make it difficult to mine new blocks and validate transactions on Ethereum version 1.

During the final launch of ETH 2.0, Whichever Miner uses the old version will get no reward for all mined blocks.

Ethereum developers have attempted to launch the Difficulty Bomb on five different occasions.

Ethereum is a blockchain platform currently at the final stage of its upgrade. The upgrade is expected to shift its mining mechanism from the Proof of Work to the Proof of Stake protocol.

This update is called Ethereum 2.0 or ETH2. Developers of Ethereum have devised the means to reduce energy consumption and lessen the gas fee.

This led to the switch to the Proof of Stake protocol. They are putting all measures to ensure that all miners switch to the ETH2 that uses the Proof of Stake protocol.

One of the ways to achieve this switch and force miners, holders, and stakeholders of Ethereum to adopt the upgrade is to introduce the “difficulty bomb.”

This article will talk about Ethereum as a blockchain platform, its upgrade to ETH2, how the difficulty bomb mechanism works, and its impact on Ethereum transactions.

Let's dig in.

Ethereum As A Blockchain App

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Ethereum (ETH) is a decentralized and open-source blockchain. This token relies on the Consensus mechanism.

Ether (ETH) is the cryptocurrency or trading unit of ethereum.

With Ethereum, you can make transactions and exchange the Ether token for other valuables on the blockchain network.

According to market capitalization, Ethereum comes second to Bitcoin (BTC) in the crypto market.

In 2013, Vitalik Buterin conceived the plan to have a cryptocurrency serve as a substitute for Bitcoin.

Gavin Wood, Charles Hoskinson, Anthony Di Iorio, and Joseph Lubin eventually came together with Vitalik Buterin, and Ethereum went live in July 2015.

Ethereum's Upgrade To Version 2.0

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The Ethereum 2.0 or ETH2 is an upgrade to Ethereum version 1.

The Ethereum project 2.0 intends to make the previous version of ethereum faster, more scalable, and reduce the high cost of gas/ transaction fees.

The transition from ETHEREUM 1.0 to 2.0 started in December 2020; however, as of 2021, both the current and upgrade versions exist side by side.

The ETH 2.0 version will deploy the Proof of Stake (PoS) mechanism instead of the Proof of Work (PoW) mechanism in the previous version.

The New version will use Validators in validating blockchain transactions and creating new blocks.

Experts expect that the upgrade will allow stakeholders, collectors, and cryptocurrency owners to stake their ETH tokens.

Asides from all these upgrades and their positive impact on the blockchain network, stakeholders and miners of ETH are still deploying the Proof of Work mechanism.

To ensure total compliance and switch to Ethereum 2.0, developers of Ethereum decided to introduce Difficulty Bomb.

What Is Difficulty Bomb In Ethereum Mining?

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Ethereum’s difficulty bomb refers to the intentional increase in difficulty that miners of Ethereum will encounter when the ETH2.0 becomes fully functional.

The difficulty is intentional and will be sudden, and it is a hardship targeted at miners that use the Proof of Work (PoW) protocol.

The difficulty bomb will lead to an exponential increase in the time it takes to mine a new block in the Ethereum blockchain. The duration of validating transactions will become longer and more frustrating.

The difficulty bomb is designed to take away the ability to centralize ownership and currency creation. It will make it fully decentralized and open-source.

The difficulty bomb will slow down the verification of transactions on the block chain. Taking a longer time will reduce the digital token's value to buyers and investors, thereby making them lose interest in such verification processes.

The first version of Ethereum blockchain has intrinsic features embedded in it. This intrinsic feature automatically increases the difficulty of mining.

The more blocks you mine, the more complex the subsequent mining. This intrinsic feature is the idea behind the difficulty bomb.

The Ethereum version 1.0 solely uses the Proof of Work (PoW), which is energy-intensive. So the launch of Version 2.0 comes with Proof of Stake (PoS) that consumes less than energy.

The need to conserve energy and adopt a less energy-consuming mechanism is why the blockchain developers of Ethereum want every stakeholder to scrap the old version.

Ethereum developers speculate that some miners may want to continue using the Proof of Work mechanism. Those who refuse to change believe that they stand to get higher profit and create more blocks as they will be few in the old version.

To serve as a deterrent and discourage them from continuing to use the PoW mechanism, Ethereum will deploy the difficulty bomb.

Ethereum has attempted to launch the difficulty bomb on five separate occasions. The Byzantium Update in 2017, Constantinople update in 2019, Muir Glacier update in 2020, London update, and Arrow Glazier update in 2021.

Conclusion

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The switch from ETH 1 to ETH 2 is long overdue. Top of the reasons is to conserve the ecosystem and jettison mechanisms that consume excess energy.

The upgrade to version 2.0 will also reduce the transaction and gas fees deducted on all Ethereum transactions.

Aside from the launch of the difficulty bomb, another plan to discourage the use of the Previous version of Ethereum is that the proof of work mining will no longer be rewarded.

So whoever validates a transaction via PoW, hashes, or creates a new block will not get any reward while the transaction will be valid.



Author: Valentine. A, Gate.io Researcher
This article represents only the researcher's views and does not constitute any investment suggestions.
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