Ethereum’s (ETH) Difficulty Bomb Is a Form Of Centralization, Gives Developers Power Over Miners

January 17, 2019 / by Zachary Mashiach

The Ethereum (ETH) Constantinople hard fork has been delayed until further notice due to a critical security bug. At this point it would be best for developers to take their time and ensure that the fork has zero problems before scheduling to deploy it again, but instead the Constantinople hard fork will have to be rushed out as fast as possible since the difficulty bomb is already slowly detonating. Block times have increased from 14 seconds in November to 15.5 seconds currently, and without a fork the Ethereum network would slow to a crawl within months.

The Ethereum difficulty bomb is a piece of code that makes block times become exponentially longer after a point in order to force miners to upgrade to a new version of Ethereum. If miners choose not to upgrade, Ethereum block times would become so slow that there would barely be any block rewards, and the Ethereum network would become plagued with high fees due to very few blocks. Eventually, it would become totally non-functional.

This is obviously not an option for miners since they would no longer make any money from Ethereum block rewards, and any Ethereum (ETH) they have stored up would become worthless due to the collapse of the network.

Thus, the difficulty bomb gives Ethereum miners no choice but to agree to developer’s forks about once a year. This gives the developers a major upper hand over miners, and defeats Satoshi Nakamoto’s vision that proof of work (PoW) mining would act as decentralized governance where miners vote on upgrades to the blockchain by mining the blockchain they agree with.

Essentially, instead of a decentralized PoW system, the Ethereum developers grabbed power by putting a bomb in the code that gives miners no choice but to listen to developers.

The Ethereum developers are explicit in their desire to get rid of miners completely in the near future by transitioning from PoW to proof of stake (PoS). The difficulty bomb is being wielded as a weapon to force miners to disenfranchise themselves. For example, the Constantinople hard fork will slash block rewards from three ETH to two ETH, which is devastating for miners but still a better outcome than staying on the current blockchain where the difficulty bomb will bring block rewards down to a trickle in the near future.

Theoretically PoS can facilitate decentralized governance, but in reality, PoS is far more centralized than PoW. Users of a PoS cryptocurrency can vote by staking their coins, but users who are wealthy will be favored over users who barely have any money. Exchanges will especially have a large amount of power if Ethereum becomes PoS since a large fraction of existing Ethereum is on exchanges.

Also, staking coins to vote usually causes the coins to not be available for use for a period of time, which is impractical for people who use coins as currency. It is likely the percentage of users who vote will be very low, and the developers will likely get what they want 100 percent of the time.

Thus, the difficulty bomb has begun a dangerous trend of centralization for Ethereum, and the very existence of the difficulty bomb means Ethereum is no longer truly decentralized. The developers are people who are clearly disconnected from the miners who secure the chain, and now, they have the power to force their decisions on miners via the difficulty bomb. This seizure of power via the difficulty bomb will eventually lead to the end of mining on the Ethereum network, and at that point, Ethereum will be even more centralized.

It would have been best if the difficulty bomb never existed, and yearly forks forced by developers never became a reality. If that were so, perhaps Ethereum would have maintained its decentralization long term, which would be a much healthier situation for the Ethereum network.