The Ethereum Foundation, an entity that oversees development of the Ethereum blockchain and its two main tokens, is urging miners, investors and traders to exercise caution as an upcoming upgrade approaches. Known as Constantinople, the next system upgrade is expected to create what is known as a hard fork, a situation that results from a split opinion among developers and miners. A hard fork causes a new cryptocurrency token to be issued, and this means a new avenue for mining, trading, and speculation.
Meet the Constantinople Upgrade of Ethereum
Lack of consensus on system upgrades is something that has been experienced more than once on the Bitcoin blockchain, which has resulted in the issuance of Bitcoin Gold and Bitcoin Cash tokens that now compete against BTC. The Ethereum blockchain has previously been forked, and this is why the Ether tokens that trade on the major cryptocurrency exchanges are differentiated as ETH and ETC, the latter known as Ethereum Classic.
Developments Investors Should Watch
To a certain extent, a cryptocurrency hard fork is similar to a stock split in the sense that current token holders would be rewarded with a new token; unlike stock splits, however, there is not a single company trying to create shareholder value. Ethereum is decentralized, but there is a strong chance that a core team will form around the new token for the purpose of driving up its value. As has been seen with Bitcoin Gold and Bitcoin Cash, there is a high potential of a social media storm brewing to promote one token over the other.