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Ethereum: Will Existing Transactions Be Split Across Two Chains?
In August 2021, Ethereum successfully completed its
hard fork, dubbed “The Merge,” which aimed to transition from a proof-of-work (PoW) consensus mechanism to a *proof-of-stake (PoS) *one. This change was necessitated by the increasing demand for scalability and usage on the network.
Following the Merge, there were concerns that existing transactions would be split across two chains: Ethereum (the original chain) and Ethereum Classic (EIP-1559). However, as we delve into the details of how this transition will work, it is essential to understand why existing transactions will not necessarily go on both chains simultaneously.
Why Existing Transactions Won’t Split Into Two Chains Immediately
There are several reasons why the split won’t happen immediately:
- Transaction Settlement: Ethereum has a built-in mechanism for settling transactions across chains, ensuring that coins move seamlessly between them.
- Inter-Chain Communication Protocol (ICP): ICP is designed to facilitate communication and data exchange between different blockchain networks, including Ethereum and EIP-1559.
- Ethereum’s Smart Contract System: Ethereum’s smart contract architecture enables the creation of self-sustaining ecosystems, allowing funds to be transferred without the need for a direct connection to another chain.
New Transaction Split: 1 Chain or 2?
When new transactions are created, they will be split into two chains:
- Ethereum (original chain): This is where coins that have already been transferred to Ethereum before the Merge will remain.
- Ethereum Classic (EIP-1559): New coins created through the transition will be deposited on EIP-1559.
Why doesn’t every new transaction go to both chains?
There are a few scenarios where new transactions might not end up on both chains:
- New Coins: If a user wants to create new coins, they will need to deposit them in either Ethereum or EIP-1559. However, this process will take time.
- Transaction Settlement: While ICP ensures that data can be exchanged between chains, it is not guaranteed that all transactions will be settled simultaneously.
In short, existing transactions will not immediately split into two chains due to various factors, including transaction settlement mechanisms, cross-chain communication protocols, and Ethereum’s smart contract system. The new coins created through The Merge will primarily be deposited into EIP-1559, while the original chain (Ethereum) will remain unchanged.
Stay informed about Ethereum’s evolution with ongoing updates from the Coinbase Research team or other trusted sources.