A Ticking Difficulty Bomb

Ethereum’s long-anticipated ‘Merge’ has suffered another delay as core developers decided to delay handling the ‘difficulty bomb’.

• The ‘Merge’ aims to migrate the current Ethereum Mainnet with the beacon chain proof-of-stake (PoS) system.
• This will transition Ethereum’s validation model from its current proof-of-work (PoW) consensus model to a proof-of-stake (PoS) consensus model.
• Under the current PoW consensus model, Ethereum is supported by validators (or miners) who use remote computers to solve complicated math problems to record and verify transactions.
• Once the merge is completed, validators will need to stake coins to confirm transactions, but there are concerns that some validators may reject a PoS mechanism.
• The primary motivation for the Merge is to begin an “era of a more sustainable, eco-friendly Ethereum”.
• According to the Ethereum Foundation Blog, the transition to PoS will reduce Ethereum’s energy usage by approximately 99.95%.

The difficulty bomb was embedded in Ethereum’s code in 2015 as a fail-safe in case validators rejected the PoS mechanism. The difficulty bomb increases the block difficulty (the time it takes validators to verify and add transactions to the blockchain) exponentially over time. Over an extended period, it becomes impossible for the validators to mine new transactions due to near-infinite block difficulty, making an end to PoW inevitable. However, if the ‘difficulty bomb’ is executed incorrectly, it could halt Ethereum before the Merge is completed leading to detrimental outcomes.