Think the primary point on this one was L2/Sharding should answer the call on the fee-dominate network as the fees drop significantly and returning the incentive only to the issuance emission. The network contracts accordingly as adoption (which takes time) moving to L2 solutions. What is completely lost it seems here is the burden of loss (burn) isn’t really on the Miner as much as it is on the user. User’s are paying for the inclusion at high fees, not miners, miners are incentivized to order sort highest transaction value first and include with block reward. But the narrative is switched to 'by burning we can drive value to eth’s bottom line" This doesnt promote using ethereum, this promotes hodl ethereum and resting on the backs of people that use ethereum to burn a portion of their contribution for the betterment of everyone else. This seems like a pivot of ideology from ‘using ethereum’ to, if you use ethereum, a portion of that supply will be burned, lets pump that price up!
When paying for fee inclusion it’s predicated on a price from a user perspective. When we use metamask, it offers a spot price with a respective yield. If ETH is 5,000.00 per eth, the cost of gwei goes up. The average transaction value back in August when everything was on fire was 240gwei, it costed me 12.xx to interact with a smart contract at 338.xx eth price. Now at 1800 eth price, that same contract interaction cost me 400+ at 540 gwei pricing. What am I missing here if eth price 5k and nothing is done for scaling? Less people will use Eth, which IMO sucks, unless eth is going to go on a crusade and drive the SoV narrative not usability.
I am adding this to my analysis coming into friday to show full size of pie potential. It is a vital number to understand with any non-protected 51% algorithm and the potential hashpower that could affect it. Targeting by Thursday.
The 3 was calculated from the average total BR+Trans+Inc fee as the average block reward payout (Yield) since last May to current. The average since November has been more around 3.7-4 eth, 2 of which is the emission, the other 1.x to 2 being the fees. An offset was suggested to ensure the yield decrease was not so drastic to cause a significant pullback in hashpower, opening up risk to the network. This number could be adjusted to 2.5 vs 3, halving amount and as long as MEV does in fact make up the difference, it becomes a mute point. If the cut + a price decrease which drops total participation that’s the risk.
Again, as this discussion gets further along I see the narrative of a min. security amount will drive eth’s decision, thus an alternative to 51% risk (MESS / Gravity Well) should be considered if this is not pushed through.
I want to thank everyone for their perspectives, and add my own in as a new miner and as a result new Ethereum user. I was really surprised when earlier this year that GPU mining at home was still profitable. This was the motivation I needed to finally jump into crypto. Otherwise, I would probably be looking at the sky-high prices of BTC and ETH and think “I’ve already missed that rocket ship.” Now I’m starting to get interested in things like Defi and staking Eth 2.0, and as I complete my CS degree I’m interested in developing on blockchains. I’ve also turned two of my co-workers as well as my cousin onto GPU mining with their gaming rigs, and one of them has also decided to invest more into understanding crypto and mining. EIP 1559 and the resistance to the compromise EIP 3368 are confusing to me. What is the motivation behind burning the fees as part of 1559? Does the Ethereum community want to discourage new miners from joining just so that they can boost the value of their own ETH through deflationary pressure? Please explain to me if the rationale is something other than just to maintain an exclusive clique.
Now at 1800 eth price, that same contract interaction cost me 400+ at 540 gwei pricing. What am I missing here if eth price 5k and nothing is done for scaling?
An eth 2 dev took the time to write out common misconceptions in the discord with parallel development being a key point. I know you are in that discord. Harping on “nothing being done for scaling” is not helping your argument.
How does eth price and gas price increase beyond usability if no one can afford to use it? The reason ETH price is rising and gas prices are high is because people want to hold and transact ETH. If the price continues to go up, this only means people value transacting. Scalability is desirable and is being worked on, but saying that price escalation is undesirable makes no sense. It is a consequence, not a goal.
lets pump that price up!
unless eth is going to go on a crusade and drive the SoV narrative not usability.
Again, this is not driving your argument. A deflationary environment is a possible consequence of 1559, not the goal. Equate this to increased security for the network being the goal of 3368, not the consequence that miner’s compensation goes up.
What is completely lost it seems here is the burden of loss (burn) isn’t really on the Miner as much as it is on the user.
1559 and the associated fee burn does not meaningfully affect fees paid by users. This is especially true because of the next point.
The average transaction value back in August when everything was on fire was 240gwei, it costed me 12.xx to interact with a smart contract at 338.xx eth price. Now at 1800 eth price, that same contract interaction cost me 400+ at 540 gwei pricing.
The key thing you are missing is that the increased fees you are paying now are not driven by the price increase in itself, but by the increased demand for block inclusion. These can of course be correlated to some extent in that higher price can attract attention to Ethereum. Importantly, in a world where virtually no goods and services are denominated in ETH, people think about fees in fiat terms (like you just did). This means that given increased price of ETH and constant demand for block inclusion, you would just see fee amounts in ETH lowered and in fiat terms the same.
The last few months lends evidence to this point: increased price has come with increased demand for usage of Ethereum. Of course lower fees are desirable through better scaling, but the idea that price should be a factor when thinking about scaling is not logical.
Personally I think arguing about the merits of the EIP is unproductive until we have more data than the speculation thus far. Considering we are mere days until the ACD call, my intuition is I don’t see how building consensus around such a big change could be done in that time even if the data were available today, let alone Thursday. It’s always possible the data paints a convincing picture the change is needed, but as of now I am unconvinced.
You’re correct, there is parallel efforts going on in scaling. Not fair to throw that completely out, more of a general statement of proceeding with PoS ahead of scaling ready for prime time is interesting. As a participant that is not tracking the progress on discord or reading our ramblings, just wonder if that transfer of conflagration is going to be worth it to the foundation/acd and dApp makers when less burdened transactions are not a thing upon the merge. Some calculus going on there on patience.
Again another fair counter. Having to write this EIP by design I will be implicated that we are trying to pad our pockets vs network security. ‘Hopefully’ none of it will be needed, but that’s the risk it sounds like folks are willing to take.
I don’t believe devs are asking for such a poll at all. What’s needed is a compelling data backed argument for why such an increase is necessary. This is not just a popularity vote.
Tim is definitely not asking for a reddit poll there. The point was to provide a compelling case for this change prior to the ACD call. The comment he’s reiterating is actually mine:
It’s worth noting that the all core devs call aims to be a place to finalise decisions, not a place to present the evidence for them. If the data backing 3368 doesn’t come out soon so it can be analysed ahead of time it has no chance of being accepted on the call. If the data is first presented on the call I’d expect it to be rejected outright.
EIPs get accepted because they build strong community acceptance and work through the issues ahead of time, then go to ACD. ACD is not the start of the process.
Well it should not hurt to see what the community thinks. Should help answer the question if it is contentious. I am in favor of polls to gauge community support.
Imagine you are printing money and you switch off the printer. Is not a profit-risk question you can´t go against your actives, miners must ensure the continuation of the blockchain and the eips must ensure also that miners have their needs covered and by making and announcement in wich we can help our miners to prepare the change without changing the final objective, giving some time to prepare new strategies I feel better than changing radically the way we are working. we need time to reorganize the system.
This post paints a very different picture of what an Ethereum miner looks like and what their incentives are than the one painted by Chun Wang of F2 Pool on the ACD call and is more in line with other miners that I have had interactions with.
I hope that the community is able to block the ill informed noise coming from ‘influencers’ 280 characters at a time and start listening more closely to essential network participants.
Whether a chain is 51% attackable is not a function of hashrate alone. It is how decentralized that hashrate is. As other commenters have pointed out, 1559 and the new efficient ethash ASIC’s will centralize the hash making the chain more attackable (ASIC hash is just as rentable as GPU).
And a sudden decrease in hashrate favors a 51% attack from both vectors. 1. Less hashrate securing the network. 2. More decentralized hashrate, as GPU mining become less favorable to ASIC miners who can likely withstand the 1559 fee burn.
Provided some additional perspective and data. Again, this does not wholesale push that this EIP has to go in no matter what, actually states everything by and large will still be ok unless a few scenarios play out. This has been my focus since the start, it isn’t a matter that its a problem now, nor after 1559. It’s a matter of a few more dynamics getting ethereum into an issue; if that were to happen, what’s the answer?
There seems be a concerted effort at ASIC fear mongering and keeping GPU profits rolling in at insane levels.
Either give us +1 rewards or kick out ASIC. That seems to be the motive. Pure greed.
But leaving motivations/feelings aside, about the 51% attack FUD:
Has anyone built a complete scenario of how a 51% attack on a majority hashrate coin would be launched?
Doing it on ETC, or like, for which a magnitude more hash than their total hash is available on rent is one one thing. But claiming the same for ETH, with only a fraction of hash readily available on rent is another.
It is not feasible.
As I said earlier, during large parts of the last bear run, you could theoretically 51% ETH with less than $100k per hour. At times it was less than $30k per hour. NOTHING HAPPENED.
Because if you build the scenario for ETH, you will realize that it will not be successful.
