Ghost of times past
Just like how we usually see oil rig counts adjust downwards as price of oil tanks; similarly the mining power is adjusting to price expectations. As a consequence of this + continuation of miner migrations I would expect there to be a 5% drop in difficulty adjustment around Sunday 18th July. I read this as normal on-going re-calibration of the environment.
ETH - miner incentives
ETH as you know is a blockchain which prides itself in allowing for experimentation (e.g. DeFi). However, over past couple of days a debate on re-org has been started amongst few prominent experimenters who dabble in arb strategies and mis-pricing.
What is a re-org: Without getting into too many technical details; blockchain is regarded as immutable; however, if someone gets more resources / mining power than all other competitors then they can attempt to re-organise (aka takeover) the chain by mining faster and changing the past. This was seen a number of times in BSV (Bitcoin Satoshi Vision coin) that Craig Wright has been promoting in his attempt to make himself known as Satoshi.
Oh dear: Simply put if past can be changed; then how do you guarantee stability...whats the value proposition of having a bank account if someone can just come and wipe my historical balance in the future?
Thought experiment: Determine optimal avenue to take to incentivise miners to rollback the blockchain by couple of blocks?
Why: Simplest motive for this is that a number of hacks have been occurring whereby funds are stolen. Now can we incentivise miners to do the extra leg-work to move back to the state prior to the hack; such that funds can be recovered?
How: Path to accomplish could be via a proposal of creation of a general purpose "tool" that for example Binance uses to put out a tender to miners that says something along the lines of "40m lost during a block mined in past 1 minute; keep 10m as your cost / incentive; leave us 30m".
Debate: However, by enabling such steps are ensuring still having an immutable and irreversible blockchain or a free market tooling where anyone with money could bribe (sorry incentivise) miners to re-write a recent past to undo a certain action?
London is coming:
On 6 July, a proposal was put forward for EIP-1559 (London) activation on Mainnet (aka production) at block #12965000. This block is expected to be mined on 4th of August. In the blockchain world the targets are not dates but block height (aka block number).
Behind-the-scenes additional changes are also being adjusted as part of this release. This is alluding to aspirations of the ETH core developers with regards to the potential time-frame of move from ETH1 (PoW) to EHT2 (PoS) of Q2/2022.
