The proposal to improve the Ethereum network and free users from the currently insane transaction fees is known as EIP-1559.
In short, it consists of establishing a market base rate to include transactions in a blocks while adding tips to incentivize the miners. Subsequently, base costs would be burned, reducing supply inflation.
Problem: The solution for users, and what the miners are objecting to, is the SAME THING…
The proposal ignited debate after several miners rejected the initiative, as they will lose a part of their reward that now will be burned, as they have stated during discussions with the community.
The goal is to lower the cost of transaction fees, which currently make Ethereum look like a complete joke. Anyone with the misfortune of explaining the world’s 2nd most popular crypto to a friend new to the market has probably found themselves scratching their head explaining the popularity of a technology that costs $10 in fees just to send someone $25.
If Ethereum started this way, it would have been adopted by no one, and currently Ethereum exists only because people believe this situation will end.
Really worth noting – if Ethereum said that it’s current fees were permanent, it would become worthless overnight. Alternatives with all the capabilities of Ethereum, and none of the issues with fees already exist.
This isn’t being treated as the disaster it is…
In it’s current state, Ethereum is pointless, or worse, a step back in technological advances for transmitting currency. Unless you were hearing a lot of complaints from people that the methods they were using were too fast, and didn’t have enough fees – Ethereum hasn’t solved anything. Anyone who has been into crypto for just a few months has spent more money sending ETH than if they just used PayPal or any old payment processor.
Some miners are unwilling to see a change in the Ethereum ecosystem and remain set on sticking to the current method that relies on commission auction to process transactions. These miners reject the fixed fees and the proposed compensation model, saying that if a new system were implemented, their income would drop dramatically. To every user, miners ‘income’ is their ‘fees’.
This is why Eth2.0 can’t come soon enough, as miners are replaced with nodes in a PoS (Proof Of Stake) system. This requires those benefitting from validating transactions to hold a significant amount of the token, meaning they likely won’t want to risk their own holdings becoming worthless by hindering advancements.
I say this as a long time Ethereum supporter – enough already!
Currently 2.0 has a timeline of milestones, a step by step process that initially seemed reasonable. But what the timeline doesn’t have – is times, dates, deadlines.
While I’m sure it’s great to not have the pressures most professional developers deal with, it may be necessary to shift towards functioning more like a private company, with angry users and deadlines to meet, which helps by both speeding up development and keeping people from moving on.
A crypto-ecosystem civil war…
Not quite as nasty as Bitcoin’s internal battles, however, predictably users who thought some relief was coming aren’t happy at miner’s last ditch effort to thwart it. The overall sentiment being that we’ve all put enough money in miner’s pockets recently.
“IMO, this exposes some of these miners for what they are” said one user on reddit, he continued “Ethereum is just a network that pays them. They “love it” because it’s paid them a lot, but they have zero attachment to its community, users, or apps”.
Another reddit user said “Now users and apps who MIGHT have been sympathetic to the miners’ cause at the time of the PoS merge are just going to look back on this “show of force” event and cite it as a demonstration of how miners are not neutral, and that if push comes to shove, they may even be willing to attack the network”
I’m not quite sure how I feel – and that’s the problem. This is because I don’t know if we’re a ‘few weeks’, a ‘month‘, a ‘couple months‘, a ‘few months‘, or ‘several months‘ away from the high fee problem being solved.
I, as many others clearly are as well, have been dabbling in using other blockchains that I had no intention of ever using until this. At some point this can drag on long enough where people will be saying it’s been weeks since they’ve done a transaction on the Ethereum network – and there’s something about tech where people tend to not look back.
I hope those in a position to influence the future of Ethereum are aware of just how easily they can lose that #2 spot – there’s no shortage of projects dreaming of taking it.