What's Ethereum Difficulty Bomb?
Vitalik Buterin, the mastermind behind Ethereum, envisioned a genuinely decentralized global computer for everyday use using blockchain technology. Inspired by the Bitcoin network but seeing its limitations, he created Ethereum. Buterin built the Ethereum blockchain with a ticking time explosive called the Ethereum Difficulty Bomb.
There are many stages in the roadmap to building a supercomputer. Even though the end goal is clear, sometimes, Ethereum developers need to develop new tech from scratch to advance to the next stage. The Ethereum Difficulty Bomb was an internal mechanism to encourage ETH core developers to push through to the Merge. The Merge is where Ethereum finally progressed from a proof of work (POW) consensus mechanism to proof of stake (POS). This article explains the Ethereum Difficulty Bomb, how it benefitted the ETH blockchain, and the future of Ethereum upgrades post the Merge. But before we dive into our main topic, we need to cover the origins of Ethereum.
Origins of the Ethereum blockchain
In 2013, Buterin launched the Ethereum whitepaper. He proposed an alternative blockchain to Bitcoin that goes beyond transaction-only capabilities. Branding Ethereum as the first ¨altcoin¨. From conception to launching the genesis block took two years. Ethereum officially launched in July 2015.
In between, the project attracted a series of crypto legends to the founding team. One was Charles Hoskinskins, who served as a Chief Executive before leaving in 2014 to start Cardano (ADA). Another was Gavin Wood, who served as the Chief Technology Officer for the Ethereum network. Gavin left Ethereum in 2016 to start Polkadot (DOT).
While the above may describe some interpersonal issues between the founding forefathers of Ethereum, the network's blockchain also faced technical issues.
Problems with Ethereum 1.0 network
The first version of the Ethereum design was similar to Bitcoin, except that it could execute smart contracts. The network used PoW consensus mechanisms to validate transactions. Proof of work consensus mechanics is energy intensive and requires a lot of hash rate to process transactions. The network soon ran into several scaling issues as it gained popularity.
In its initial simplistic design, the Ethereum mainnet nearly buckled under the pressure. Enthusiastic users piled on smart contract activities such as initial coin offerings (ICOs), decentralized finance (DeFi) platforms, and NFTs, which led to significant network congestion.
Two years later, by the end of 2017, Ethereum faced the following challenges: High gas fees, Low transactions per second (TPS), and high energy consumption (see the chart below). These challenges in scaling the Ethereum blockchain bring us to the discussion of our main topic.
The Ethereum difficulty bomb
Returning to the vision of building a global supercomputer, the cofounders of Ethereum anticipated the challenges the network would face when onboarding more users. By folly or ingenuity, they ingrained the Ethereum Difficulty Bomb protocol in block no.200000 of the network.
The Ethereum difficulty bomb had the sole purpose of exponentially increasing the difficulty of mining Ethereum. Since proof of work requires solving computational puzzles to process transactions, the difficulty bomb protocol would make these puzzles nearly impossible.
Ethereum developers engineered the protocol so that mining a block would eventually become too expensive and consume so much energy that no one would want to mine it. Hence bringing forth the Ethereum' ice-age. The idea was to start a chain reaction that would accelerate the developers to speed up the network's transition to proof of stake.
While this may seem counterintuitive at first glance, triggering the difficulty bomb presented several benefits for the network.
Benefits of the Ethereum difficulty bomb
Besides purposefully lighting up a fire under Ethereum developers to speed up the transition to proof of stake, the difficulty bomb also had the following intended consequences:
Increasing the difficulty in solving puzzles encouraged cryptocurrency miners to move away from energy-intensive proof of work consensus mechanisms.
It also discouraged Ethereum blockchain forks. As a result of puzzles ultimately becoming impossible to solve, no miner could profitably continue using the proof of work network once the whole blockchain had transitioned to proof of stake.
Ultimately, the protocol sped up the transition process, forcing miners to upgrade their nodes on time. However, achieving the feat required overcoming a few hurdles.
Delaying the Ethereum difficulty bomb
Transitioning to proof of stake took Ethereum a total of seven years to achieve. According to its initial set-up, around September 2015, at block 200,000, the difficulty bomb triggered, increasing the difficulty exponentially. However, its effects only became apparent about a year later, in November 2017.
Ethereum developers scrambled as the time frame to proof of stake narrowed. As proof of work mining became more complex, processing transaction fees on the network also required higher gas fees. Responding to the ETH communities’ complaints about expensive transaction fees, they conducted a series of updates which improved the network. These upgrades pushed back the date of the Merger and delayed the difficulty bomb.
Ethereum underwent a total of six upgrades, and they are as follows:
- 2017: Byzantium update
The Byzantium hard fork implementation, made Ethereum lighter, faster, and more secure. Additionally, it created the framework for the eventual switch to the proof of stake consensus mechanism.
- 2019: Constantinople update
Like the Byzantium update, the Constantinople hard fork implementation increased efficiency and speed. It also lowered the gas fees on the network.
- 2020: Muir Glacier update
The Muir Glacier network upgrade effectively delayed the difficulty bomb for another 4,000,000 blocks or approximately 611 days, buying Ethereum developers another year.
- 2021: London update
The London Hard Fork introduced new improvements to the network. Similarly to the Byzantium and Constantinople upgrades, its purpose was to make some preparations before the release of Ethereum 2.0.
- 2021: Arrow Glacier update
Arrow Glacier delayed the network's difficulty bomb, allowing developers more time to prepare Ethereum 2.0.
- 2022: Gray Glacier
The Gray Glacier was the last delay. Its sole purpose was to postpone the bomb's detonation by another 100 days.
The Merge: transitioning from PoW to PoS
In September 2022, the much-anticipated event of transitioning from proof of work to a proof of stake network finally occurred. ETH developers successfully brought about the new version of Ethereum, also referred to as Ethereum 2.0. Ethereum 2.0 uses proof of stake consensus mechanisms to validate transactions.
The staking process entails locking up 32 Ethereum tokens in return for participating in the network's consensus and validation measures. Users who stake their tokens are known as validators and receive rewards through fees paid in ETH.
The transition could not have come at a better time, as the focus on global climate change intensified. By doing away with the proof of work consensus mechanism, Ethereum 2.0 will result in a 99.95% reduction in Ethereum's energy consumption. The transition to proof of stake also removed the need for the Ethereum difficulty bomb, as computational power is no longer needed to process transactions.
The Ethereum Merge was a huge stepping stone for the Ethereum blockchain to become the supercomputer that Buterin imagined. But while it accomplished a lot, it is only the beginning of the blockchain's roadmap.
Future of Ethereum upgrades
So now that the Ethereum blockchain is free from the existential threat of the difficulty bomb, what comes next post-Merge? Last year, Buterin commented that the network would only be 55% completed after the Merger. He also shared the roadmap for the upcoming upgrades that stand in the way of the blockchain becoming the first global supercomputer. They are as follows:
The Shanghai upgrade
The Shanghai upgrade’s most notable change is to allow validators to withdraw their staked ETH tokens. It will also upgrade some network parts to improve scaling, efficiency and speed. Speculators predict that this event could prompt a mass liquidation or lead to a surge in new users.
The Surge
After the Shanghai upgrade, the Surge will occur. It entails implementing ¨sharding¨. Sharding is splitting the blockchain into smaller chains called shards. The upgrade will improve the network’s scalability, gas costs, and transaction speeds.
The Verge
After the Surge, the Verge will occur. The Verge upgrade aims to optimise storage on the Ethereum blockchain. It will implement ¨Verkle Trees¨, a structure that seeks to reduce the amount of data network validators must keep on their machines. Ultimately, this will also help make Ethereum more scalable.
The Purge
After the Verge, the Purge will occur. As implied by its name, this upgrade will help ¨purge¨ or reduce the space required to store ETH on a hard drive. This stage aims to support freeing up space so more developers can easily build on the blockchain.
The Scourge
After the Purge, the Scourge will occur. The Scourge is aimed at providing censorship resistance and avoiding centralisation. The upgrade will ensure reliable and fair credibility-neutral transaction inclusion on the Ethereum blockchain.
The Splurge
Finally, the Splurge will occur. This upgrade will comprise a series of smaller updates to ensure the Ethereum network functions properly after the previous four significant updates. It will combine several upgrade suggestions that didn't fit the other upgrades and put the finishing touches on the plan for enhancing the blockchain.
The new Ethereum
In the last few years, Ethereum has upgraded its blockchain multiple times. Protocols that used to plague the network, such as the Ethereum difficulty bomb, are no longer relevant in the new network. With all of these upgrades, Buterin says that Ethereum will be able to process 100,000 transactions per second (TPS).
That will put Ethereum miles ahead of Visa and Mastercard, which can only process around 24000 TPS and 5000 TPS. As of now, there’s no concrete schedule for these upgrades, but we can expect completion by about 2025.
FAQs
Why is ETH difficulty increasing?
ETH difficulty has stopped increasing. Since the Ethereum blockchain moved from POW to POS in 2022, the difficulty rate has remained 1.00.
What is the Ethereum difficulty bomb?
The Ethereum difficulty bomb is a protocol ingrained in the blockchain’s network to exponentially increase the difficulty in mining ETH when using a proof of work mechanism. Its purpose was to speed up the network’s transition to proof of stake and discourage the forking of the network.
Why Ethereum needed a difficulty bomb?
Ethereum needed a difficulty bomb for several reasons, but the main one was to force miners to switch over to proof of stake by disincentivising the proof of work mechanism.
What is the use of a difficulty bomb?
In the Ethereum network, the difficulty bomb was programmed to increase mining difficulty starting at block 200,000. It increased the block time necessary for completing puzzle solutions. It also caused lower ETH payouts for proof of work miners.
