On a recent conference call, Ethereum core developer Tim Beiko addressed the development team that in addition to working on consensus protocol upgrade for the upcoming Eth2, he would continue to focus on the performance optimization of the client end for the Eth1 / Eth2 merger. The conference participants have concurred not to activate a “functional fork” in December, which means that the difficulty bomb delayed by EIP-3554 will likely be suspended again, as the Ethereum network expects no new EIP before the merger.
The delay of the difficulty bomb is no surprise. Its activation is closely related to the Eth2 merger. In July, Tim Beiko stated that if the Eth2 merger was not completed in December, the difficulty bomb would be postponed accordingly.
For its function, the difficulty bomb will directly affect Ethereum mining difficulty, which is determined by the difficulty formula written by developers in the early days.
The formula is as follows:
block_diff = parent_diff + parent_diff / 2048 * max(1 — (block_timestamp — parent_timestamp) / 10, -99) + int(2^((block.number / 100000) — 2))
Bitcoin, the forefather of cryptocurrencies, has its mining difficulty adjusted per 2,016 blocks, and each difficulty adjustment will be based on the total block generation time of the latest 2,016 blocks. Under normal circumstances, it takes 14 days to generate 2,016 blocks. Thus, if the total period is less than 14 days, the difficulty will increase accordingly; and if that period is greater than 14 days, the difficulty will decrease accordingly.
As shown above, the first half of the Ethereum difficulty formula resembles that of Bitcoin, which adjusts the mining difficulty based on the previous block generation time and actual mining difficulty of the previous blocks. In other words, the difficulty of the Ethereum network will be adjusted according to the network hashrate to ensure that the block generation speed of Ethereum stabilizes at about 14 seconds.
And in the second half of the formula, we see a difficulty factor that increases every 100,000 blocks. It grows exponentially as the block height accumulates. Therefore, at a certain block height, the proportion of the factor will be significantly increased, causing explosive growth in the overall mining difficulty. That is why the second half of the formula is vividly referred to as the “difficulty bomb”.
The difficulty bomb has been introduced at the outset by Ethereum designers. The roadmap in the Ethereum white paper had included the Ethereum 2.0 upgrade with the network consensus protocol changing from PoW to PoS. In this process, the difficulty bomb would ensure the smooth transformation in the consensus protocol. As the proportion of the difficulty factor increases, the mining difficulty will increase accordingly, which will consume enormous hashing power and make it difficult to mine new blocks. When the required hashrate exceeds the mining revenue, the miners will stop mining one after another, until finally, no one will mine. By then, the PoW chain will be out of use, and the Eth2 merger will be achieved as scheduled, without any adverse effects such as forks.
As designed, the difficulty bomb should have been activated when the block height reaches 200,000. However, due to Eth2’s multiple delays in the roadmap, the Ethereum developers and community are not yet prepared for PoS. Moreover, the difficulty bomb is ideally activated two to three months before the Eth2 merger; if activated too early, it will significantly increase the block generation time, which will seriously impact the healthy development of the Ethereum ecosystem.
Given that, with a certain amount subtracted from the block height in the difficulty formula, the difficulty bomb has been postponed four times in the Byzantium fork, Constantinople fork, Muir Glacier fork, and London upgrade.
It is fair to say that the activation of the difficulty bomb marks the end of the Ethereum PoW chain. Therefore, for Ethereum PoW miners, the launch of the difficulty bomb can be regarded as an effective signal for evacuation. Based on the current situation, the difficulty bomb will be delayed until the first half of 2022. About two to three months after its activation, the mining difficulty will skyrocket. At that time, Ethereum PoW miners can only abandon the original mining method and stake ETH for PoS mining, or continue PoW mining after transferring the hashrate to other cryptos with the same algorithm.