What Is Constantinople?
In the context of Ethereum, the term "network upgrade" might be somewhat misleading (even though it's the term that Ethereum developers are officially using to refer to Constantinople). It doesn't have to do with networks or network connections in the conventional sense; instead, it will mean changing the underlying protocol that controls the way the Ethereum blockchain works.
The changes have been scheduled to take effect on January 16, 2019, but the exact timing depends on operations on the Ethereum network that cannot be predicted with complete accuracy.
Once Constantinople is implemented, any nodes that disagree with the changes will be excluded from the network, which will effectively result in a fork of the blockchain. But, at this point, there is no reason to expect that a large number of nodes will disagree with Constantinople.
Constantinople Change Summary
Constantinople will include five specific changes, detailed on the Ethereum blog. All of them are “Ethereum Improvement Proposals,” or EIPs, which are ideas that community members can submit for changing the Ethereum protocol.
Of the five EIPs that Constantinople will implement, four involve updates to the way data is managed or accessed on the Ethereum blockchain. The nuances of those updates will probably only be of interest to those who develop DApps or smart contracts using Ethereum
The Big Change: EIP 1234
The fifth update, however, is more significant for the Ethereum community at large. Known as EIP 1234, it decreases the amount of cryptocurrency that miners can earn by mining on the Ethereum blockchain. It also delays the implementation of Ethereum's switch to a proof of stake (PoS), consensus model. Changing to PoS will help keep Ethereum efficient as the network becomes larger and larger.
The chief goal behind EIP 1234 is to avoid creating instability on the Ethereum blockchain before the switch to PoS is complete. There has been much discussion in the Ethereum community about the PoS change, but work toward its implementation has proceeded more slowly than some have envisioned. By decreasing mining rewards on Ethereum, EIP 1234 essentially serves as a lifeline that will keep Ethereum running smoothly until PoS goes live on the blockchain. EIP 1234 was designed under the assumption that the switch to PoS will take place about a year from now.
EIP 1234's Winners and Losers
For members of the Ethereum community as a whole, EIP 1234 is a good thing. It helps to ensure the healthy operation of the network until PoS can be implemented. In this way, EIP 1234 will help to prevent some of the scalability issues and other technical problems that famously beset the Bitcoin blockchain as it grew a couple of years ago.
On the other hand, Ethereum miners stand to lose from EIP 1234, at least in the short term. By decreasing mining rewards, the change places fewer profits in the hands of miners. This means that mining activity on the Ethereum blockchain is likely to decrease once Constantinople takes effect, because there will be less incentive to mine.
However, it also seems a safe bet that Constantinople will make the Ethereum blockchain and protocol better than ever by adding technical features that allow developers to build better and more secure DApps and smart contracts. In turn, Constantinople is likely to increase the value of ether, which will also increase incentives for mining.
What to Expect From Constantinople
Concern among miners about how Constantinople will affect them, combined with the fact that Ethereum founder Vitalik Buterin played little role in the discussion of the changes, created some worry early on that Constantinople would destabilize Ethereum, or lead to a massive "hard fork" in which significant numbers of nodes choose not to follow the new protocol.
On the eve of the changes, however, these concerns no longer seem very significant. Ethereum miners will probably not suffer any major long-term harm because of Constantinople and there is little evidence that many nodes will ignore the changes. The updates will instead enhance Ethereum from a technical perspective, ultimately adding value for all stakeholders.