Ethereum’s Most Anticipated Hard Ford ‘Shanghai’
The 151st meeting of the team comprising developers of Ethereum Core took place on 8th December 2022.
During the meeting, several issues, pertaining to the Ethereum blockchain, were deliberated upon. The highlight of the meeting was however the network’s most anticipated hard fork known as ‘Shanghai’.
In the recent past, ‘The Merge’ was the biggest hard fork that occurred a few months ago.
Effects of Hard Fork
During The Merge hard fork, the network switched to proof-of-stake (POS) from the proof-of-work (POW) because the network rules changed drastically.
When there is a hard fork, it subsequently requires the users to ensure updating of software pertaining to their nodes.
This software update is compulsory otherwise users could not use their nodes as the change brought by hard fork becomes ‘backward-incompatible’.
In the 151st meeting, the developers anticipated that the next hard fork ‘Shanghai’ is likely to occur somewhere in March next year.
It is expected that Shanghai’s hard fork may also impact staked Ethereum withdrawals on the Ethereum blockchain.
As of 9th December, approximately 15,597,175 units of Ethereum (valuing $19.88 Billion) are locked into the contract called “Becon Chain”.
Shanghai Hard Fork May Occur Several Times
Ethereum developers are well-aware that in order to access these locked Ethereum funds, the hard fork holds the key.
They are also aware that the occurrence of a hard fork wouldn’t be one-time only instead it will take place several times.
Tim Beiko, who is part of Ethereum Core’s team, confirmed that the developers and others wish withdrawals to take place soon. He acknowledged further that withdrawal is the top priority for the network’s developers.
Beiko also told that the users are anticipating the Shanghai fork to happen somewhere in March 2023.
Apart from being concerned about Shanghai hard fork, Ethereum developers are also considering the possibilities of improving the Ethereum blockchain’s efficiency.
In this connection, a software upgrade called ‘Ethereum Improvement Proposal (EIP) 4844’ has been implemented by the network’s software programmers.
Software upgrade primarily aims at introducing a unique transaction into the network through which beacon nodes would store blob data. The preservation of blobs data would however be for a short timeframe.
How Ethereum Is Likely To Respond To Shanghai Hard Fork?
There is an expectation that a hard fork would require investors to dispose of their crypto holdings, however, it is unlikely to happen.
What is certain however is that there shall be a promising reward that is likely to occur because of ETH staking.
The users would be able to earn handsome income if they happen to keep their altcoins locked into the contract during the validation process.
On the other hand, Ethereum is a full-on cryptocurrency and entirely different from an altcoin. Hence, when a hard fork would happen, most Ethereum holders are unlikely to liquidate any or all of their Ethereum funds.
This is logical because history shows that hard forks usually benefit altcoin holders. This is so proven by the fact when The Merge hard fork took place a few months back.
At the time of The Merge, when Ethereum was changing from POS to POW, the hard fork was also volatile. Consequently, the users earned passive incomes and then resorted to staking their crypto funds in Ethereum.
Ethereum does not want a Similar Outcome as the Merge Implementation
The Ethereum development teams are hoping that they do not end up facing the same situation as they did when the Merge was implemented.
At that time, the situation turned ugly for the developers who had hoped that the Merge would bring Ethereum back to its full potential.
They thought that the investors would return to the market and they will generate strong revenues. However, things did not turn out the way expected and the investors did not show up to support it.