The looming hard fork of the ethereum network — the popular blockchain for crypto-related ventures — is scheduled for late Wednesday Eastern Time and unlike recent cryptocurrency forks, the change isn’t expected to create friction.
The latest version of the software, known as Constantinople, will be implemented after block number 7,080,000 is mined: A block is a set of data that is validated and confirmed in the process known as crypto mining.
The upgrade is intended to reduce mining rewards from three to two, speed up processing times, improve the way the network monetizes data storage and address crypto scalability — the ability to process transactions efficiently and quickly. Scalability has been widely viewed as a hurdle to acceptance of digital assets.
Read: A team at Northwestern think they have solved one of bitcoin’s biggest problems
The upgrade is considered a hard fork as the blockchain will split into two, however, with the upgrade classed as noncontentious — meaning all transaction validators are likely to upgrade their software.
The change is widely touted as positive for both the community and the price of the cryptocurrency that runs on the ethereum blockchain. “In the short-term, shortly before and during the fork expect to see price volatility pick up although we would expect to see things steady out after there is consensus on the chain,” wrote Piers Courtney, analyst at cryptocurrency brokerage firm GlobalBlock.
“It has been widely reported that this hard fork is expected to relieve some of the tensions that have been building regarding ETH and is likely to be positive for the valuation of Ether in the foreseeable future.
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On Tuesday, Ether ETHUSD, -1.62% was trading at $130, more than 60% of its mid-December low but still down more than 90% from its all-time high above $1,400.
Thursday’s ethereum hard fork will be the eighth all-time, according to data from Etherchain.org.
Read: Are cash-strapped ICOs behind Ether’s underperformance?
Read: You can read about Constantinople from the Ethereum blog here
This fork contrasts to a fissure in ethereum in 2016 that occurred back that resulted in Ethereum Classic. That division occurred after 3.6 million Ether (around $50 million at the time) was stolen from digital currency venture capital fund The DAO . That theft initially led to a contentious debate before the community decided to enact a split as a way to address the stolen assets.
Some members of the ethereum community refused the upgrade, which created Ethereum Classic. These members — mainly hard-core crypto evangelists — argued that the fork went against one of distributed ledgers founding principles, immutability.
Perhaps, one of the more notable hard forks to date, however, resulted in the creation of Bitcoin Cash BCHUSD, -2.74% in 2017, which split the community and resulted in the underlying cryptocurrency plunging in value.
However, Wednesday’s ethereum hard fork is setting up to be markedly smoother, by comparison.
“By this time on Thursday, we should have a brand new ethereum, which is faster, cheaper, and has 33% less inflation,” wrote Mati Greenspan, senior market analyst at eToro.
After a volatile 12 months, Ether has slipped to third place on the list of largest digital currencies behind XRP, XRPUSD, -1.24% which runs on the Ripple protocol and bitcoin, BTCUSD, -1.09% the best-known cryptocurrency, which accounts for more than half the value of all cryptocurrencies, according to data from CoinMarketCap .
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Aaron Hankin Aaron Hankin is a MarketWatch reporter in New York who covers cryptocurrency and financial markets.
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