Ethereum merger completes, ETHW emerges
At 14:00 on September 15, 2022 (UTC+8), the epic Ethereum merger was finally announced successfully. Since then, Ethereum has officially entered a new era.
The biggest feature of this merger is that the consensus mechanism of Ethereum has changed from PoW (Proof of Work) to PoS (Proof of Stake). Although there is only one word difference between the two, the stakeholder group involved in this transformation is unprecedented.
In the PoW stage of Ethereum, miners compete for the right of bookkeeping through hash collisions and sort transactions. With the adoption of proof-of-stake Ethereum, people will randomly become verifiers by staking Ethereum on a new chain (beacon chain) to sort transactions in the network, thus forming a new consensus form.
In addition to some positive iterations, this shift also means that traditional mining behavior will be unsustainable, which will undoubtedly have a huge impact on the interests of a large number of miners.
Therefore, it is no surprise that with the continuous progress of the Ethereum merger, a fork craze has begun to spread in the miner circle. KOL Guo Hongcai (Bao Erye) and TRON founder Justin Sun also became active as community leaders in the early domestic currency circle. They opened the chapter of Ethereum hard fork under the banner of defending the interests of miners.
According to the plan, 24 hours after the completion of the Ethereum merger, the main network of the forked network ETHW (EthereumPow), which continues to maintain the PoW consensus mechanism, will be officially deployed, and then the chain ID of ETHW will be switched. In order to reserve sufficient time, the ETHW mainnet will go live at the designated time after processing 2048 empty blocks.
But this process didn’t seem to be smooth from the beginning, and a small episode occurred during the ETHW mainnet launch.
Coming to September 16th, the day after the Ethereum merger, many users found that they still could not access their blockchain using ETHW’s official mainnet information, and could not use encrypted wallets to connect to their network.
Subsequently, SmartBCH, the BCH public chain expansion plan, pointed out that the connection problem of the ETHW network may be due to the use of the same chain ID as the SmartBCH test network. Although this problem has been fixed in the future, the unfavorable apprenticeship this time seems to have added a concern to everyone.
After the ETHW mainnet went online, some of the original miners of Ethereum switched their computing power to the ETHW network, and the maximum computing power of the entire network reached 80.56 TH/s.
At the same time, as a forked network of Ethereum, ETHW also issued token airdrops to all ETH holders 1:1. At the same time, Ouyi OKX, FTX, Bitfinex and other trading platforms have listed ETHW trading pairs.
According to the experience of previous blockchain forks, the price trend of the forked chain tokens after the launch can reflect the consensus basis behind them to a certain extent.
Taking the OKX platform as an example, ETHW opened at a price of $15, and its price once rose to $27.99 after going online. After a short high, the price of ETHW began to fall rapidly, and the closing price fell to $12.08 on the day, down 56.8% from the highest point.
In the following days, ETHW continued its downward trend. On September 19, ETHW fell to a minimum of $3.88, and then rebounded to around $5.15, which was 81.6% lower than the high on the day of the launch.
As of now, the price of ETHW has retraced to $6.42, with little intraday volatility.
The main reason why the price of ETHW ushered in a sharp drop in just 5 days is the large amount of selling by the holders who received the token airdrop.
According to the data of the ETHW browser of Ouke Cloud Chain on September 19, after the ETHW mainnet went online, the network processed more than 9.56 billion ETHW transactions. According to its price trend, most users chose to choose after receiving the airdrop. sold. There is even news that Guo Hongcai, the community leader, has also shorted ETHW in his hands.
The market sell-off of ETHW reflects that users are not optimistic about the prospects of this forked network. To make matters worse, in addition to the instability of its own consensus foundation, ETHW has also encountered security doubts in recent days.
Replay Attack Storm
According to the monitoring by the security agency BlockSec, some attackers have carried out replay attacks on the ETHW chain. Replay attacks usually occur after the blockchain network is forked. Since the addresses and private keys on the two chains are the same, and the transaction format is exactly the same, the transaction on one chain is completely legal on the other chain. . Transactions initiated on one chain will also be confirmed if replayed on the other chain.
And ETHW is not unprepared for this. During the preparation of the fork, the ETHW team implemented replay protection at the code level, requiring that all transactions must be signed with the chain ID. But despite this, there are still loopholes found.
According to the analysis, the attacker first transferred 200 WETH to the ETH network through the Omni cross-chain bridge of the Gnosis chain, and then replayed the same message on the PoW chain to obtain an additional 200 ETHW. Although the amount of assets involved in the attack was not large, it made users question the technical capabilities and security of ETHW.
Subsequently, ETHW officially issued a statement saying that this attack was not a chain-level transaction replay, but a call data replay caused by a flaw in a specific contract. But even so, people’s concerns about ETHW are still hard to dispel.
Looking back on the journey of ETHW, whether it was the use of the same Chain ID as the SmartBCH testnet during the mainnet launch, or the occurrence of replay attacks, people left a bad impression on ETHW.
But in reality, these quick fixable problems are minor technical problems, but the heartbreak they cause is the real fatal blow.
Miners flee with computing power
After the ETHW mainnet was launched, many mining pools such as F2Pool, Poolin, and BTC.com announced their support for ETHW mining. The ETHW community also cooperated to launch a backup mining pool, Ethwmine, dedicated to providing long-term mining pool services for ETHW.
These mining pools serving miners hope to continue earning revenue from miners who move to ETHW. But unexpectedly, the computing power of the ETHW network was rapidly lost in just a few days.
When the ETHW mainnet was first launched, some of the original miners of Ethereum switched their computing power to the ETHW network, and the maximum computing power of the entire network reached 80.56 TH/s.
However, on September 19th, the computing power of ETHW’s entire network dropped to 29.92TH/s. In just four days, the computing power of ETHW’s entire network dropped by 62.8% compared to the peak of 80.56 TH/s after the mainnet went online. According to its current computing power level, it only occupies 3.89% of the total computing power of 769 TH/s before the merger of the Ethereum mainnet.
In contrast, ETC, RVN, ERGO and other networks that use the same mining algorithm have seen significant increases in computing power, especially ETC once increased from 50 TH/s before the merger to more than 200 TH/s. This also means that ETHW is not the only option for the original Ethereum miners.
In fact, the reason for the decline in computing power is not difficult to understand. As we mentioned above, in the short five days since ETHW was launched, its currency price has dropped significantly due to the massive selling of holders.
It is precisely because of the poor performance of the ETHW price that more and more miners began to flee with their computing power due to unprofitability. In the case that the ETHW consensus foundation is relatively weak, the miner group has also abandoned it because it is unprofitable, and this ill-fated fork chain is now even more gloomy and bleak.
How should ETHW face the future?
It is difficult for us to remain optimistic about the future development trend of ETHW. As we all know, the value of the public chain depends on the construction of the ecology on the chain. The more prosperous the ecology on the chain and the more active the activities on the chain, the more the value of the public chain is often recognized. At present, most of the core developers and mainstream applications of the Ethereum ecosystem do not support forked projects such as ETHW, which directly prevents ETHW from inheriting the mainstream on-chain applications of the original Ethereum. Therefore, the current ecology on the ETHW chain is very weak.
However, ETHW is not completely unreliable. Ethereum’s PoW to PoS not only involves the interests of the miner group, but also forces major mining pools to respond. As such, many mining pools have announced their support for ETHW.
In addition, many exchanges will also launch ETHW according to market conditions. This will give ETHW some ecological support in the short term.
But from a long-term perspective, if ETHW still cannot strengthen the consensus foundation, it will undoubtedly face huge selling pressure, and the price may continue to bottom out; and whether the price performance of ETHW can remain healthy largely depends on the public chain Ecology and community building. And this is undoubtedly a long and difficult challenge.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/80-drop-in-ethw-in-five-days/
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