The Ethereum Foundation successfully completed another hard fork of Ethereum (ETH) at block 2,463,000, which occurred Tuesday October 18, 2016. A second (well technically third) fork is due later this month. The original and “immutable” Ethereum Classic (ETC) chain is also due for a hard fork on October 25th.
What The Fork Is Going On?
Since September 18th, the Ethereum network has been constantly under attack by a person or group attempting denial of service (DoS) attacks on the Ethereum blockchain. This resulted in the network becoming “bloated” and filling up with a large number of pending transactions, increasing network confirmation times. They were able to achieve this by introducing an operation code (opcode). EXTCODESIDE opcode is the most well known, which caused miners and nodes to spend more energy processing the blocks than the reward they received.
Every operation that an Ethereum contract performs on the network pays a fee (called the gas fee). The attacker called the computationally expensive opcode, while paying low gas fees. Take a look at some of the transactionshere.
The introduction of Geth by the Ethereum Foundation is being hindered by the network bloat. That is why a hard fork was deemed necessary. This fork is known as the Ethereum Improvement Project 150 or EIP150. The next fork will attempt to remove empty accounts the attacker used to flood the network.
Since Ethereum Classic has the same code as Ethereum, the same attacks are happening. ETC devs have also introduced a fix, raising questions about the immutability of the chain and where the line in the sand is drawn for hard forks. Under what circumstances is a hard fork deemed necessary for a chain that markets itself as immutable?
What’s the point of the attacks? Is someone sending thousands and thousands of empty transactions, paying gas fees, just so they can get the Ethereum Foundation to enhance the network? Unless they intend to destroy the network (and fail to think the devs will fix it), then I think the below chart illustrates the main reason.
Both ETH and ETC have dropped more than 20% since the attacks started. Any shorts during this time have become extremely profitable, perhaps more so than the gas fees the attacker has been paying.
This presents an interesting opportunity. Let’s assume the attacks caused the price drop, and the subsequent forks fixed the underlying issues. This sets up ETH and ETC for a sharp move upwards.