Since 2014, when Vitalik Buterin helped to create Ethereum ( ETH 0.94% ), he has known there was a problem: scalability. In Ethereum’s white paper (the document that explains how the system is supposed to work), it says, “One common concern about Ethereum is the issue of scalability. Like Bitcoin, Ethereum suffers from the flaw that every transaction needs to be processed by every node in the network.”
Ethereum and more well-known cryptocurrency Bitcoin operate with a challenging system called proof of work (we’ll explore this later). But Ethereum’s founders didn’t want to stay on the proof-of-work (PoW) system. That’s why they created what’s known as the “difficulty bomb.” And this ticking time bomb is set to go off in June. Here’s what this means and why investors can relax (well, at least somewhat).
Image source: Getty Images.
This was always the plan
From the beginning, Ethereum developers planned to address the scalability problem by switching from a PoW blockchain to a proof-of-stake (PoS) blockchain. For example, an official Ethereum Foundation blog post in 2015 already laid out the long-term roadmap, including this PoS switch.
The first version of Ethereum was called Frontier. However, at the 200,000th block, Frontier underwent its Thawing upgrade (also called Ice Age). This introduced the so-called difficulty bomb, or more properly, the “difficulty adjustment scheme.” Once reached, it gets exponentially harder for miners to validate Ethereum transactions.
Unaddressed, Ethereum mining would get so difficult that no one would be able to do it efficiently, bringing the network to an almost complete standstill — just like a river flash-freezing into a glacier.
But why, though?
While there is a team of developers behind the scenes with Ethereum, remember that the network is decentralized, and miners are independent parties. Indeed, you could go out today and buy equipment to mine Ethereum right now. There’s no need to get anyone’s…
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