How the Ethereum Developers hold the Network Hostage and Why It needs to do so.
The Iceage, no not the movie with the cute squirrel in it, the Ethereum Iceage. Elegantly known as the Difficulty Bomb. In short, The Ethereum Difficulty bomb is a tool that at a certain block height arbitrarily increases the difficulty of Etheruem. Regardless of the network terahash or amount of miners participating in the Ethereum ecosystem. Thus the network difficulty becomes so high that mining Ethereum effectively freezes and the network grinds to a halt, The Iceage.
Strange then, that a network that relies on PoW would create something that destroys their own network, so why does it exist?
According to ETHHUB
- To ensure that the core developers of Ethereum 1.0 are “forced” to upgrade the network via a hard fork (if only to delay the effects of the bomb) so that the network does not stagnate innovation-wise
- To act as a deterrent for miners who wish to continue mining the Ethereum 1.0 (Proof of Work) chain once the network moved fully to the Ethereum 2.0 (Proof of Stake) chain
The first effect of this Difficulty bomb was felt in 2017. Ethereum was slated for PoS then, but it wasn’t close to ready. The Difficulty bomb was pushed back to 2019. Once again ETH was not ready for POS, The effects were felt another time as block-times crept up. By Jan 2019 they pushed the Difficulty bomb back another 2 years… to July 2021. Once Again here we are. ETH PoS only just launched Phase 0, with the Ethereum PoS mainnet still not operational.
However, according to Hancock the existing implementation of Ice Age is unnecessarily complex and confusing to communicate to the community. He adds that any updates to the design should be able to model the effect on the network in a straightforward way that is easy to predict when it occurs. Currently, Hancock does not believe this is the case. (coindesk.com)
If it’s been pushed back so many times, why keep it around? Why not just remove the Iceage until Ethereum PoS is ready, near completion, and put in that final 1.0 Hardfork?
Because They need a ‘threat’, a poison pill, to Feed the Ethereum miners and mining community in order to keep in line via Mafia-style. Making them an offer they cannot refuse.
GPU and ASIC Miners, The useful Idiots for Ethereum
When I first started Mining Ethereum in June 2017, I still had a bad taste in my mouth from GPU mining in the last bull run in 2013-2014. Every GPU coin was overrun by ASICs, prices declined dramatically, I quit mining. ETH Mining seemed like a small bright spot. A project with great potential, I can actively participate with GPUs, and it’s profitable. I loved it. I am still mining ETH with a small mining farm today. However being in this space has thought me something, Miners are useful idiots to the Ethereum ecosystem.
I first encountered this around the debate surrounding ProgPoW. I had fought hard for ProgPoW. Being a GPU miner myself, I Watched ETH Dev calls, Did my research, talked to some ETH devs, Kristy, and others involved around ProgPoW, and did what I could to support it.
Sadly for it to fall on the deaf ears of ETH Development team. ProgPoW being Accepted then shelved for no reason other than DeFI’s community unfounded worries of a chain split. With EIP-1559 and the miner community heavily against it, I feel yet again as we speak, they pretend to listen.
The debate now rages on EIP-1559 and the included gas fee burn. Gas fees are currently making upwards of 50% of ETH block-rewards for miners. Many miners and mining pools are against EIP-1559, for obvious reasons, as it affects their bottom lines. Sadly, While the community call on Feb 26 was interesting, it was a show trial. The upcoming Eth 1.0 Dev calls to decide to implement EIP1559 is already decided, as far as I’m concerned.
“After 1.5 years of active development, I believe EIP-1559 is finally ready to be included in a network upgrade and would like to propose it be included in the upcoming London upgrade” -Tim Beiko, Issue #254
One only has to look back at The previous IceAges to know the miners are being held hostage, with the poison pill being dangled in front of them. ‘Accept or you’ll be poisoned’.
How Ethereum Miners are fed the Poison Pill.
Ethereum miners have been subject to two(unscheduled) reward reductions. ETH rewards were never ‘baked’ in similar to BTC. So how do you get miners to accept lower Rewards? Obviously, they wouldn’t accept based on merit that lower rewards are better for the Ethereum ecosystem and price(which has still been unproven). Introducing, The Iceage Simply put, The Iceage forces miners to accept the new chain, or be forever frozen out. Negating a chain-split. This happened in 2017 with EIP-649 Rewards were reduced from 5 to 3, Iceage was rolled back. Then Again in 2019 with EIP-1234. When rewards were reduced from 3 to 2.
EIP-649: Metropolis Difficulty Bomb Delay and Block Reward Reduction
EIP-1234: Constantinople Difficulty Bomb Delay and Block Reward Adjustment
EIP-2384: Muir Glacier Difficulty Bomb Delay
EIP-3238: Difficulty Bomb Delay to Summer 2022(include in London)
EIP-1559: Fee market change for ETH 1.0 chain (include in London)
Most curious of this was the reward decrease from 3 ETH to 2 ETH. During a bear market.
“In November, crypto news outlets reported that mining on GPUs (graphics processing units) no longer proved profitable. The price decrease in late 2018 limited the profitability of many miners, and some chose to leave the network” (Consensys.net)
“The thirdening of Ether’s block rewards will lead to a decrease in inflation. Should the reduction in ETH inflation have a positive impact on the market, miner behavior holds that miners will return to the network.” (Consensys.net)
This didn’t happen. Ethereum network shredded a majority of Terahash during 2019 and 2020 bear market. Prices bounced from $120 per ETH to a high $300 per ETH. Miners were against the reward reduction, a second time, during a bear market. However, it was forced in against their objections with the difficulty bomb.
With EIP-1559 and miners arguing against the base-fee burn, they’re going to be fed the poison pill again because the Ethereum developers won’t have a choice nor will they compromise with the useful idiots.
“ …Now with Sparkpool onboard, the side that opposes the plan(EIP1559) has above 50% of the network’s total hashrate at the current moment.” (Theblockcrypto.com)
The London hard-fork, while not finalized, We can speculate will include EIP-1559 and EIP-3238. Those EIP will be simultaneously included. The Ethereum miners will have no choice but to accept the EIP1559 or be forced out of the network through the Iceage.
To me, it seem dubious, devious, a little evil. The changes the Ethereum 1.0 Development team wants to implement but will have ramifications on the Ethereum mining Ecosystem(That they still need to operate until ETH 2.0 is released). Yet I understand as well because if cartels start forming because They oppose an EIP such as 1559 it will set a dangerous precedent. Hence why they always wait until the very last minute, miners start feeling the effects of the Iceage to Fork-off/Delay the Iceage.
Conclusion: Proof Of Steak
Ethereum’s extremely bold idea has never been done before. Move from a PoW chain to a PoS chain. Another thing that’s also never been done before in any Cryptocurrency is holding the miners and network hostage in order to push-forward unfavorable EIP protocols. Taking a step back, I’d wish for a more symbiotic relationship with Crypto Dev’s and their mining community. Unfortunately, it has more turned into a leeching of each-other. They need us, we need them. Because simply, in the end, humans are selfish beings and will do what’s in their best interests even more so if money is involved.
In conclusion, Being that Ethereum is currently the #2 PoW mining chain, I assume unintentional by its creators, they needed a way to coerce a social contract. The Difficulty Bomb, AKA Iceage does exactly what it’s intended for, A forceful acceptance of the main Ethereum PoW chain that the ETH Dev’s want, at the behest and bemoan of crypto miners interests.
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