Ethereum’s long-awaited, many-times delayed Constantinople upgrade (a hard-fork) finally arrived on Feb. 28, and it appears to have gone smoothly now that we are a couple of days removed.
This upgrade is actually just a bridge towards more important upgrades in scalability and consensus. It is enhancing the protocol for off-chain solutions and for the shift to proof-of-stake consensus (from proof-of-work), as well as some improvements in efficiency ie. speed/cost.
The upgrade included implementation of several Ethereum Improvement Proposals (EIP):
EIP 145 – Bitwise shifting: “help developers with code optimization” (blockgeeks)
EIP 1052 – Optimizing large-scale code optimization: speeds up smart contract verification
EIP 1283 – Reduces gas cost for SSTORE operation: reduces costs for posting smart contracts
* This proposal was found to have vulnerabilities, so an upgrade call St. Petersburg will concurrently remove this part of the Constantinople upgrade as both will be implemented on the same block. We discussed this vulnerability in January, when it caused the Constantinople upgrade to be delayed.
Ethereum's 11th Hour Delay of the Constantinople Upgrade Reveals Fundamental Flaws
EIP 1014 – Allows communication with off-chain addresses by leverage state channels: improves scalability
EIP 1234 – Delays difficulty bomb and reduce block reward: adjusts consensus protocol parameters preparing for shift to Proof-of-stake (slows down inflation).
I found this video explanation by Blockgeeks to be very clear and concise:
As noted before, this upgrade is not really THAT big a deal even though it is a critical bridge between what Ethereum will evolve into. It is the Proof-of-Stake upgrade that will have the most impact on the economics of the Ethereum network because there will no longer be “mining” rewards that come out of the Proof-of-Work consensus.
Price action of Ethereum (ETH/USD) reflects a market that is unimpressed.
ETH/USD Daily Chart
After failure to clear $160 and stay above, price has retreated to just above $130.
It looks like price action continues to lose steam and could be falling towards $120 next, with the $100 and $80.25 support pivots in sight as well.
The prevailing trend is bearish, and there does not seem to be a successful price bottom yet, so we should probably anticipate further downside pressure towards the $100 and $80 area.