Blockchain Protocol upgrades; Why and what it entails

On 15 September 2022. Ethereum launched its long-awaited upgrade called the merger, a critical stage among the five development phases of Ethereum towards a highly scalable network. About a week after that, the Cardano network has successfully integrated the first phase of its vasil hard fork upgradewith the final phase in the works to be fully active by the end of September.

The conversation surrounding the global use of blockchain technology is a recurring one. Not only are new protocols emerging every day, but existing blockchain networks are constantly working to improve their systems and make user experiences as seamless as possible. This improvement we see with these existing systems will determine whether there will still be conversations around blockchain technology for decades to come.

Following the recent news of several blockchain upgrades in the crypto landscape, here is an article discussing why blockchain protocol upgrades and what they entail.

The rudiments of Blockchain upgrades

Although blockchain technology was first proposed as research as far back as 1991, the first practical application, Bitcoin, did not emerge until 2009. The blockchain ecosystem is over a decade old, but scalability issues have been a significant setback for most network since its inception.

Many blockchain networks have developed decentralization and security and have shown the capacity to compete fairly with centralized networks in that regard. However, the critical obstacle for top decentralized systems today remains scaling.

Layer-2 scaling solutions is a popular method that most networks use to improve a blockchain protocol’s scalability and efficiency. A popular layer-2 scaling solution is the polygon network on the Ethereum blockchain. However, these scaling solutions have their purposes and can only do so much to offload the work on the mainnet.

They act as an external network to facilitate transactions outside the main chain without affecting the layer 1 blockchain. And this brings us to the primary method of increasing scalability. Blockchain upgrades provide solutions to various complex problems caused by the decentralized structure of the main chain, increasing network throughput and improving scalability.

Blockchain fork

When there is a change or change in a blockchain’s underlying protocol, the system experiences a phenomenon called the blockchain fork. A fork occurs whenever a system moves to change the blockchain’s protocol or there is a fundamental change in how the system works. When this happens, the chain splits, creating a second blockchain that works slightly differently, but with the same history as the original chain. There are two categories of forks in a blockchain system: the hard and the soft.

Soft fork

The soft fork is more like a newer version of a blockchain upgrade where the changes become the new set of standards for the system as long as all users and community members accept it. Cryptocurrencies use the soft fork to introduce new features and functions. Bitcoin and Ethereum are two cryptocurrencies that have done this in the past, and the adjustments made mostly work with the pre-fork blocks because the final product is accepted on a single blockchain.

Hard fork

In the case of the Ethereum merger, the change from proof-of-work (PoS) to proof-of-stake (PoS) consensus mechanism is a practical example of a hard fork. While the network is gradually migrating to PoS, some miners validating transactions on the PoW network plan to keep the old network running.

In the long run, it will be challenging for such users who choose to hold Ethereum PoW after the merger because they will not be able to continue mining. With a percentage of the community choosing to remain on the PoW mechanism, consensus is divided and a hard fork is a solution.

Many blockchain networks have experienced a hard fork in the past. Ethereum itself was heavily forked in 2016, leading to the creation of the Ethereum Classic (ETC) together with the Ethereum blockchain (ETH). Ethereum may once again undergo a hard fork. After The Merge, the blockchains that retain the original PoW consensus method may be forked in addition to the Ethereum (ETH) blockchain, which has now switched to the PoS consensus mechanism.

Finally

Ultimately, the point of each upgrade is to significantly solve the problems and challenges presented by the blockchain trilemma. Provides a highly scalable system for users while maintaining decentralization and security. Finding a good balance has always been the goal, and an upgrade is a step towards finding that balance.