An Ethereum hard fork creates new rules that improve the system, is activated at a specific block number, and necessitates all Ethereum clients to install an upgrade. Ethereum’s Byzantium Hard Fork was the first part of the Metropolis upgrade.
Metropolis is an Ethereum development initiative being implemented through two hard forks: the Byzantium Hard Fork was launched in October 2017 at block 4,370,000, and the Constantinople hard fork expected to launch late in 2018.
Metropolis is the third of a three-part Ethereum upgrade that started with Frontier, released in 2015, as a “beta release” for developers to experiment and develop decentralized apps, and Homestead, released in 2016, to stabilize the platform.
So, the Ethereum hard fork roadmap includes four hard forks, three of which have been completed (Frontier, Homestead, and Byzantium, and one hard fork still to be released (Constantinople).
The Byzantium hard fork was designed to make ethereum lighter, faster, and more secure. It expanded the acceptance and use of Ethereum and its smart contracts, especially for business transactions, causing the price of ether to shoot up.
The Byzantium hard fork consisted of nine Ethereum Improvement Protocols (EIPs) designed to improve Ethereum’s privacy, scalability, and security. The following are broadly considered the four most important Byzantium EIP’s:
1. Transaction Status Code Embedded In Receipts – Transaction status is now communicated in successive blocks instead of being a root parameter within the Merkle tree, and the difficulty adjustment formula was tweaked to take uncles into account. These measures expedite chain formation (scalability) by enabling parallel processing of multiple transactions and allowing the creation of parallel blockchains as second layer solutions, similar to the Bitcoin Lightning Network. A second layer solution improves scalability by creating smaller chains and moving transactions there, thus relieving the blockchain of its transaction load and not requiring nodes to verify every single transaction sent to the Ethereum network. Plasma is the most prominent second layer solution being developed.
2. Turbo-charged Cryptography – New code, running directly on CPUs rather than within the client software, lessens power requirements with zero-knowledge cryptography that enables a node to prove that its holds the requisite private keys without revealing the keys.
3. Reduced Rewards – Block reward was reduced from 5 ether to 3 ether, a reduction in line with Ethereum’s eventual plan to eliminate block rewards altogether with Proof of Stake.
4. Delay of ice age PoW difficulty bomb by 1 year.