Categories: EducationFAQ

What are Ethereum Uncles?

In Ethereum, we often come across some very strange terms. For example, there is often a discussion about “uncles,” and how they impact the overall blockchain. Very few people seem to be aware of what these uncles are and represent. It is interesting to see “incorrect” network blocks still lead to some form of a reward. Let’s explore this “uncle” concept a bit further.

Ethereum has Many Uncles and They all Matter

These have nothing to do with family ties in the traditional sense. Instead, an uncle is a referred to as a network block which would normally be considered an orphan. Bitcoin users are well aware of how some blocks are orphaned because they were mined just after someone found the correct block header. Uncles work in a similar way, but there is a major difference.

Miners on the Ethereum network are incentivized to include a number of uncles every time a block is mined. This may sound very strange at first, as it allows “orphaned” blocks to still yield a reward for miners. This is another example of how Ethereum is very different from Bitcoin. In Bitcoin mining, an uncle would yield nothing.

Some people may wonder why the Ethereum network is set up in such a way they would incentivize miners to include uncles. There are two main reasons for this. First of all, it decreases decentralization in Ethereum mining. Like it or not, but cryptocurrency mining is often a very centralized activity. Even though there are many different mining pools to choose from, centralization is still present

Related Post

Rewarding miners for producing uncles is an interesting incentive. Not everyone wants to mine at a large pool, and this move effectively promotes solo mining to a certain degree. It is also an incentive to join smaller mining pools, as uncles will still yield some form of reward. Any miner who is not part of a big pool often has to deal with slight network delays when new blocks are discovered. In some cases, uncles can be discovered with a split second off the official block being mined.

The second purpose comes in the form of increasing overall Ethereum chain security. Uncles are still subject to the same mining work as conducted to mine the main chain blocks. This approach results in wasting less computing resources on stale blocks, which can only be beneficial for the network as a whole. Do keep in mind including uncles also creates a bit more blockchain “bloat,” which is becoming somewhat of a recent issue with Ethereum.

One big potential issue with this uncle system is how it can create incentives for miners -or even pools- to mine empty blocks. As we have seen on the Bitcoin network, mining empty blocks serves no real purpose whatsoever. An empty uncle block would make no real sense either, yet there is a reward associated with it. So far, it does not appear anyone is purposefully mining empty uncle blocks, but that situation may come to change over time. The whole concept is still very interesting.

JP Buntinx

JP Buntinx is a FinTech and Bitcoin enthusiast living in Belgium. His passion for finance and technology made him one of the world's leading freelance Bitcoin writers, and he aims to achieve the same level of respect in the FinTech sector.

Share
Published by
JP Buntinx

Recent Posts

The Calculated Collapse of $TG: How a “Utility” Token Was Engineered for a Rug Pull

In the unpredictable world of cryptocurrency, new tokens launch daily, each one a shining beacon…

1 day ago

Staked Ethereum Hits Record High as Whale Accumulation Signals Bullish Long-Term Sentiment

Once more, Ethereum is commanding the spotlight as fresh figures indicate that the amount of…

1 day ago

Arbitrum Sees Surge in Protocol Revenue and EIP-7702 Adoption Following ArbOS 40 Upgrade

The ecosystem on Arbitrum keeps flaunting its robust foundations, with a steady incline in the…

1 day ago

Ethereum Whale Accumulation Surges as Long-Term Confidence Outweighs Short-Term Volatility

Once again, major market players are focusing on Ethereum. The whale activity surrounding the second-largest…

4 days ago

Week in AI: Fartcoin Steals the Spotlight Amid Market Turmoil

It has been a tumultuous week for the artificial intelligence sector in crypto. Sharp valuation…

5 days ago

BSC Foundation Resumes Strategic Accumulation: VIXBT, CAKE, LISTA, and MOOLAH Under Spotlight

Following a brief stint of dormancy, the BSC Foundation is back in action, reestablishing its strategic…

7 days ago