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Will Constantinople Upgrade Split the Chain?

With fewer than 48 hours to go for Ethereum’s Constantinople upgrade, we have put together a compendium of web resources to monitor the progress of the hard fork. For a quick recap of the planned upgrades that the Constantinople hard fork brings to the Ethereum blockchain, you can refer to our summary blog post from last week. One of the biggest changes that will be made to the protocol as part of the Constantinople upgrade is that the block reward will be reduced to 2 ETH from 3 ETH, raising concerns over mining profitability and the potential drop in hash rate, with miner margins already bleak in the current market due to depressed prices. Pre-fork statistics indicate that the fork might be harmonious, with roughly 50% nodes updating their client softwares to support the fork and the rest are expected to follow suit. However, given that the migration to the new PoS consensus mechanism is still many months away, it will be interesting to see how the miner community will respond to the 33% reduction in headline revenues after the fork. The last time mining rewards were reduced from 5 ETH to 3 ETH after the Byzantium hard fork, mining was still profitable due to reasonably high ETH prices and the hash rate did not drop significantly in response to the hard fork. In the current scenario, with profit margins <10%, the average miner would be in the red post the 33% reward reduction.

So, can there be possibility of miners forking the chain to reinstate the 3 ETH reward?  

Meanwhile in Crypto Wonderland….

“Russia to Finalize Crypto Bill” The State Duma, the lower chamber of the Russian parliament, will discuss a draft bill on crypto regulation in the first few months of 2019 according to the the head of Committee on Financial Markets, Anatoly Aksakov. The long-awaited bill on digital assets is tied to initiatives on crowdfunding and investment platforms and both projects will be discussed together, most likely in February.

“NASA Eyes Blockchain Solution” A recent report from the NASA Ames Research Center proposes a blockchain solution to improve air traffic control networks. The prototype uses blockchain to minimize potential security risks from new aircraft surveillance technology mandated by the Federal Aviation Administration by 2020. Use cases for the blockchain-powered solution would apply to military, corporate and aircraft operators who require privacy.

“Huobi Launches EOS Trading Platform” Cryptocurrency exchange operator Huobi Group has launched a new trading platform dedicated to EOS, the fifth-largest cryptocurrency. The project commenced operations as a trial version on Friday. The exchange offers EOS trading in Bitcoin (BTC), Ethereum (ETH), and Tether (USDT). After the end of the beta period, Huobi will conduct an analysis to determine what other altcoins to add. Along with the three pairs, Huobi Global also supports two additional EOS markets – with Huobi Token (HT) and HUSD.

“LedgerX Launches Bitcoin Volatility Index” LedgerX has launched its first Bitcoin (BTC) price volatility index called the LedgerX Volatility Index (LXVX). According to LedgerX, a cryptocurrency asset manager regulated by the CFTC, the LXVX incorporates the level of fear and uncertainty in the bitcoin market, and thus can be thought of as the “bitcoin fear index”. The company will draw the data for LXVX from the Bitcoin options product that it already offers to its customers. The new index, which is currently down by about 20 percent from the beginning of the year, can help traders and investors monitor risk.

“Danish Tax Agency to Access Exchange User Data”Skattestyrelsen, the Danish Tax Agency has received a green light from the country’s Tax Council to collect trader information from local cryptocurrency exchanges to see if traders are paying taxes as due. This move gives the agency access to crypto traders’ data, including trades, names and addresses, and central person registration (CPR) numbers. Three unnamed crypto exchanges will now have to hand over the data for the period spanning 2016–2018.

Crypto Twitter Pick

What We’re Reading / Listening To

96 Theses for Crypto in 2019 by Ryan Selkis

Unqualified Opinions, Episode 1: Ryan Selkis & Arjun Balaji

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