Today in the creation of block 4370000 the planned major upgrade ‘Byzantium’ was implemented into the Ethereum blockchain and the 100% hardfork occurred. But what exactly is Byzantium and what does it mean for you and me?
Byzantium is just one component of the update Metropolis. In a nutshell, it is designed to make the platform lighter and faster. It will improve the transaction speed, smart contract security and privacy functions.
The Ethereum Virtual Machine (EVM) is the software platform that allows the creation of dApps and smart contracts on the Ethereum platform. Any company wanting to create their own dApp, whether it be a game or their own cryptocurrency, can do it much easier with the EVM. Like everything, however, the EVM has its limitations.
Ethereum is only just over two years old remember. So, upgrades are necessary for the Ethereum platform to reach its potential. As of now, Ethereum transactions are completely transparent. This is fundamental to the Ethereum blockchain because by rendering the details of each transaction visible and storing them in a distributed ledger, it makes the possibility of double spending virtually impossible. But transparent transactions don’t sit well with many people.
With the implementation of Byzantium, however, transparency will make way for anonymity. The upgrade will allow the EVM to use different types of cryptography, such as zkSNARKS, which allows for fully encrypted transactions. This wasn’t possible before because zkSNARKS would have been too expensive for the old blockchain, but the hard fork will introduce gas-subsidies that makes a zkSNARKs cheaper to compute.
It will become much more attractive for business to use as transaction speeds will increase significantly. What’s more, with the block reward being lowered by 2 ETH miners will be paid less for their work.
Scalability issues are also being improved. Byzantium allows for bigger more complex contracts to work off-chain. The smart contract will be more secure as it can be fully designed off-chain and then implemented on chain for validation. This will free up so much space that a complex contract would take up, which will help the blockchain run more freely.
Elections will now also be possible on Ethereum. An election on Ethereum would be completely transparent and impossible to manipulate. There would be no chance of someone double voting, or not having their vote counted. As with many things blockchain technology will bring, this will save the election process so much time and money.
So, what exactly does it mean for an Ethereum investor? Well, the price hasn't "mooned" straight away, but we are in a bearish market at the moment, and confidence (or lack of) controls the market price. I won't make any predictions, because absolutely nobody knows any future price. However, with anonymous transactions, off-chain computing opening the way for faster and more fluid blockspeeds, while making smart contracts more secure, and even the possibility of honesty in to politics, I have no doubt it will have massive impact on the long term valuation of Ethereum