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Vitalik Buterin Proposes New EIP to Tackle Ethereum’s Sky-High Gas Fees

97 points by marcoslozada 5y ago

ChemSpider 5y ago
Does ETH have any significant advantage over Solana, Cardano or Polkadot except the much higher market cap? To me, they all seem be more or less the same, a bit like different Linux flavors. (If one would disappear, nobody would miss it, or?).
- londons_explore 5y ago
  Anyone can fork a coin and add a few minor features. Yet, the fork would have nearly zero value. And history has shown that coins with near zero value very soon have no users and die. That tells you that it isn't the features that give a cryptocurrency its value. The value is in the pool of users who believe it has value. The features of a cryptocurrency are in many ways irrelevant.
  - tromp 5y ago
    > Yet, the fork would have nearly zero value. I'd like to believe that. But then I see projects like Bitcoin Gold that just replaced the PoW and enriched the authors with 100,000 coins and somehow it's valued at nearly $1B...
    - tata71 5y ago
      I see it the way I see New Mexico vs Mexico.
- timmg 5y ago
  > (If one would disappear, nobody would miss it). Makes you wonder what the value is, then. Interop between blockchains seems doable (I guess Coinbase, more or less, does this). At that point what makes one cryptocurrency worth more than another?
  - chrisco255 5y ago
    The applications and communities built on top of each network as well as the security profile of the chain. There are thousands of applications that live on Ethereum, that have smart contracts controlling their treasuries, that have access to interoperable liquidity, that have established history and user base, etc.
- hanniabu 5y ago
  Yes, it hasn't taken any shortcuts or sacrifices to the blockchain trilemma. They have the best balance of decentralization, scalability, and security. Solana has made many sacrifices to decentralization and basically requires a super computer to operate a validator. As a result the chain is so centralized it actually went offline for a day which is unacceptable. Cardano is just a hot mess. They spent years in research to "fo things right from the get go" and since their launch have had a ton of issues and realized why ethereum made the decisions they've made. Polkadot is pretty much following ethereum's rollup design but their downside is it's pretty much a vc chain like the others. Nobody would miss these chains if they disappeared, just like nobody misses the previous wave of "eth killers" (eos, neo, tezos, lisk, etc). They come in with a huge marketing budget to mislead the likes knowledgeable mainstream, but the builders see through all that nonsense and as Palmer says, "developers, developers, developers".
  - ghostwriter 5y ago
    > since their launch have had a ton of issues and realized why ethereum made the decisions they've made. could you be more specific about Cardano issues?
    - hanniabu 5y ago
      One straight forward one is their scaling. They would bash ethereum's developers saying how stupid they are and cardano spent years on research papers without any practical experience to come up with off-chain payment channels. Just recently (a week ago?) They finally submitted and confirmed rollups were better and that they'd start working on those. But with their speed of development, grifting founder, and more interest in marketing than building, I don't expect them to finish any time soon or be relevant.
      - exdsq 5y ago
        Cardano does have significant benefits though. For example native tokens rather than wrapping things in smart contracts saves a lot of space, computation, and expense.
- tracedddd 5y ago
  It’s more like social networks. Sure you may have a similar (or better) Twitter but everyone is on Twitter so it’s hard to get any traction. If you do capture a significant number of real users than yes there’s not much difference. People will mention the fees or efficiency but the fact is a lot of the underdogs have not had to face any actual load so it’s easy to brag about low fees.
- noman-land 5y ago
  I think many people assume there will be a multi-chain universe, with some chains emerging as good for some applications and some for other. There will be private chains, too, and all these data need to be communicated across chains, which is already happening. I can't imagine that a clear winner would emerge any time soon or maybe ever.
- grahamperich 5y ago
  There are many, but the most obvious is that Ethereum is the oldest of the turing complete layer 1 blockchains, and it has an order of magnitude more core protocol developers and indie developers building on top of it. Same is true for developer tooling. The question in my mind is: will Ethereum's network effect buy it enough time to scale and get to an optimal "ETH 2.0" state where fees are negligible and throughput is high? Or will it be supplanted before then? My money is on the former, but it's certainly a question worth pondering! 3. Ethereum is far more secure in an adversarial environment. 51% attacking Ethereum would require more capital than performing a similar attack on other chains.
- yokem55 5y ago
  Solana, beyond the extreme hardware requirements to run a node, is deeply economically centralizing. It's more or less a standard delegated proof of stake stake system with one nasty twist - validators have to pay transaction fees to vote. At current sol prices this is about $100,000/year. This has some very big implications in a dpos system. In dpos, a validator gets validation slots proportional to their delegation and staking level, and you earn the transaction fees paid in those slots. More delegation, more slots, more fees earned from users and from other validators voting on the correctness of the chain. The net effect is that if your validator has a delegation level below the average of all the validators, you will bleed out your capital over time to validators that have an above average delegation. To add a nastier twist to this, the Solana foundation in their generosity, contributes delegation out of their Sol allocation to validators that they like. Essentially, the foundation gets to decide who will be a profitable validator and who won't.
bhaak 5y ago
Wow, what a badly researched article. > Notably, EIP-4488 is a "short-term" remedy for Ethereum's sky-high gas fees. No, it would not be a remedy at all. The high gas fees wouldn't be reduced a lot by a reduction of the calldata gas cost. > Arguably, the main update that is expected to solve Ethereum’s scalability issue is the shift from proof-of-work (PoW) to proof-of-stake (PoS) mechanism. Another bad take. Changing the consensus engine does nothing for gas fees. Sharding is expected to do that but that is not planned to be introduced in 2022. What EIP-4488 would do is reduce the cost of Layer 2 (L2) solutions like rollups. Those need to commit their state hashes to the L1 blockchain. But those are currently somewhat expensive as well because of the high calldata gas cost. EIP-4488 might help with gas fees indirectly if it encourages the usage of L2 solutions which will then have less gas costs to commit to L1.
- hanniabu 5y ago
  Yup, they did a horrible job and it spreads more misconceptions.
- chrisco255 5y ago
  It would reduce the cost of rollup transactions by as much as 80%. And rollups are already 90-99% cheaper than L1, so I'd argue it provides a huge incentive to users and applications to migrate to L2, and helps relieve quite a bit of burden until sharding is released.
  - toufka 5y ago
    Are rollups generally expected to be 'native' to etherium, or orthogonal - but packaged in a way that becomes well-integrated with L1? Or said another way, it seems like there are L2 rollup 'providers' - are these 3rd party providers inherent in an L2 solution, or are they features that will be subsumed later by the parent protocol?
    - everfree 5y ago
      Those 3rd party L2 providers are inherent to Ethereum's scaling roadmap. No need to ossify them or integrate them tightly with the protocol layer, they can remain modular and in free market competition on the smart contract layer.
officialchicken 5y ago
I love the idea that a fundamental economic problem (high demand) can be met with another half-baked technological solution. It's crypto comedy gold. Hint: speed up the timeline for the deployment of ETH2 / Proof of Stake if you want to lower gas fees - a.k.a. increase capacity beyond 10k transactions a day.
- keymone 5y ago
  proof of stake has nothing to do with transaction throughput.
  - officialchicken 5y ago
    Yes, ETH2 does come with Sharding, but nobody really knows what that is. Proof of Stake is the ETH2 selling point.
    - keymone 5y ago
      sharding is a pipe dream. literally no different to just throwing your hands up, spinning up few more parallel ethereum networks and proclaiming you've solved a scalability problem.
      - serverholic 5y ago
        They are only sharding data. The execution layer isn't going to be sharded for awhile, if ever.
        keymone 5y ago
        let's see what they actually ship, if ever.
    - chrisco255 5y ago
      Sharding is a very simple to understand concept and it's used in database systems today. Effectively, Ethereum's long-term data will become split across 4 partitions (which function as one chain). A validator would not be required to validate data on all 4 shards, they could validate across just one. Ethereum's execution will continue to be serialized while the data layer is parallelized. This allows the chain data to grow without excessive hardware requirements.
keymone 5y ago
from a guy that many years ago said that the more code a consensus algorithm has - the worse it is. and we've only seen more and more code, turning the knobs and coming up with workarounds, year after year.
- serverholic 5y ago
  Does this actually have anything to do with consensus? From what I understand the core consensus algorithm has stayed the same for awhile.
  - keymone 5y ago
    seems like it does, because it changes block validation function.
- rfd4sgmk8u 5y ago
  Agreed. And it just gets worse. The latest generation of 'VC chains' are more complex again. One popular one even failed to produce blocks for 17 hours. Even when >50% of the miners were kicked out of Chinam Bitcoin didn't fail. It took a few weeks of slower blocks until the consensus agreed on a lesser difficulty. Complexity is the enemy of security. These systems just grow more complex and fragile as they progress.
  - vmception 5y ago
    They just grow faster and get patched quickly. Bitcoin has had brief and temporary service failures a variety of times early on. A brief issue during a chain's first year of operation really isn't as damning as you think it is. There is a lot of immediate commerce right now which is awkward to disrupt, but just patch and move on.
    - keymone 5y ago
      exactly what i need from the foundation of a financial system, to grow quickly and patch bugs on the fly! what could possibly go wrong.
Zamicol 5y ago
Ethereum continues to promote designs that lower fees in the future. Users anticipate a more usable system in the future, even though it has very high fees at the moment. If Ethereum was not working on lowering fees, users would quickly migrate to another chain.
- deleted 5y ago
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deleted 5y ago
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artfulhippo 5y ago
Gas fees have been too high since Cryptokitties in 2017. Actually, even before Ethereum launched, anyone with a calculator could have predicted the scaling issues. After all, bitcoin was never built for millions of consumers to transact onchain. And yet, Ethereum and Bitcoin have succeeded despite design flaws. It goes to show that you can do much better by serving a niche with massive demand (speculators, darknet users) than trying to build a Product for Everyone. I don't expect a Product for Everyone to come from the Ethereum or Bitcoin communities, communities rife with tribalism and whose insiders are billionaire ideological extremists, totally out of touch with normies. That much of the media coverage of crypto, such as this article, is inaccurate doesn't help matters; insiders increase their tribalism and anti-establishment angst, and outsiders increase their confusion. So I do hope that R&D into layer 1 and consensus tech doesn't relent. As it stands, the highest bandwidth chain (Solana) makes significant sacrifices in decentralization -- SOL is hyper concentrated in VC/whale/Core Team hands, and the Core Team plays a huge role as Kingmaker, picking winning projects to signal-boost -- and there is not yet a chain with reasonable bandwidth and PRIVACY. In the people's imagination, blockchain is a privacy technology. But in actuality, it's a panopticon. Until the gap from perception to reality closes, this market is ripe for disruption.
- reginold 5y ago
  What are your favorite cryptocurrency communities / projects?
  - shill_cunt 5y ago
    algorand. Silivio Micali. enough said.
  - monkeydust 5y ago
    Gridcoin and PowerLedger
  - marcoslozada 5y ago
    We are working with many of them on Baas256.com … Solana, Poligon, BSC… and many more.
buckie 5y ago
Does anyone know where the actual latest design for ETH 2.0 sharding is? Whitepaper/repo because w/o sharding you can't scale layer 1, and if you don't scale layer 1, you can't address layer 1 gas costs. I've always been of the opinion that their sharding effort would fail, but I want to stay well informed. Sharding POS is very hard because the "trilemma" is correct for POS (kadena.io / explorer.chainweb.com being the example that the trilemma is solvable if you stick to POW). Layer 2/zk-rollups will only help successful dapp devs lower their gas costs (see: DyDx). It doesn't relieve the pressure on layer 1 as other apps/patterns move in until a new equilibrium is reached.
- marcoslozada 5y ago
  Yes: https://ethereum.org/en/eth2/ https://ethereum.org/en/eth2/
bob332 5y ago
Lol butterin must be one of the biggest crackpots in the world. The creator of a pointless mad product
benjamir 5y ago
This nonsense makes me want an explicit downvote. One day the HN crowd is pushing what a joke proof of stake is -- really? Who guessed so. The next day the newest newest crypto poop gets served on golden platters.

97 points by marcoslozada 5y ago

Does ETH have any significant advantage over Solana, Cardano or Polkadot except the much higher market cap? To me, they all seem be more or less the same, a bit like different Linux flavors. (If one would disappear, nobody would miss it, or?).

londons_explore 5y ago
Anyone can fork a coin and add a few minor features. Yet, the fork would have nearly zero value. And history has shown that coins with near zero value very soon have no users and die. That tells you that it isn't the features that give a cryptocurrency its value. The value is in the pool of users who believe it has value. The features of a cryptocurrency are in many ways irrelevant.
- tromp 5y ago
  > Yet, the fork would have nearly zero value. I'd like to believe that. But then I see projects like Bitcoin Gold that just replaced the PoW and enriched the authors with 100,000 coins and somehow it's valued at nearly $1B...
  - tata71 5y ago
    I see it the way I see New Mexico vs Mexico.
timmg 5y ago
> (If one would disappear, nobody would miss it). Makes you wonder what the value is, then. Interop between blockchains seems doable (I guess Coinbase, more or less, does this). At that point what makes one cryptocurrency worth more than another?
- chrisco255 5y ago
  The applications and communities built on top of each network as well as the security profile of the chain. There are thousands of applications that live on Ethereum, that have smart contracts controlling their treasuries, that have access to interoperable liquidity, that have established history and user base, etc.
hanniabu 5y ago
Yes, it hasn't taken any shortcuts or sacrifices to the blockchain trilemma. They have the best balance of decentralization, scalability, and security. Solana has made many sacrifices to decentralization and basically requires a super computer to operate a validator. As a result the chain is so centralized it actually went offline for a day which is unacceptable. Cardano is just a hot mess. They spent years in research to "fo things right from the get go" and since their launch have had a ton of issues and realized why ethereum made the decisions they've made. Polkadot is pretty much following ethereum's rollup design but their downside is it's pretty much a vc chain like the others. Nobody would miss these chains if they disappeared, just like nobody misses the previous wave of "eth killers" (eos, neo, tezos, lisk, etc). They come in with a huge marketing budget to mislead the likes knowledgeable mainstream, but the builders see through all that nonsense and as Palmer says, "developers, developers, developers".
- ghostwriter 5y ago
  > since their launch have had a ton of issues and realized why ethereum made the decisions they've made. could you be more specific about Cardano issues?
  - hanniabu 5y ago
    One straight forward one is their scaling. They would bash ethereum's developers saying how stupid they are and cardano spent years on research papers without any practical experience to come up with off-chain payment channels. Just recently (a week ago?) They finally submitted and confirmed rollups were better and that they'd start working on those. But with their speed of development, grifting founder, and more interest in marketing than building, I don't expect them to finish any time soon or be relevant.
    - exdsq 5y ago
      Cardano does have significant benefits though. For example native tokens rather than wrapping things in smart contracts saves a lot of space, computation, and expense.
tracedddd 5y ago
It’s more like social networks. Sure you may have a similar (or better) Twitter but everyone is on Twitter so it’s hard to get any traction. If you do capture a significant number of real users than yes there’s not much difference. People will mention the fees or efficiency but the fact is a lot of the underdogs have not had to face any actual load so it’s easy to brag about low fees.
noman-land 5y ago
I think many people assume there will be a multi-chain universe, with some chains emerging as good for some applications and some for other. There will be private chains, too, and all these data need to be communicated across chains, which is already happening. I can't imagine that a clear winner would emerge any time soon or maybe ever.
grahamperich 5y ago
There are many, but the most obvious is that Ethereum is the oldest of the turing complete layer 1 blockchains, and it has an order of magnitude more core protocol developers and indie developers building on top of it. Same is true for developer tooling. The question in my mind is: will Ethereum's network effect buy it enough time to scale and get to an optimal "ETH 2.0" state where fees are negligible and throughput is high? Or will it be supplanted before then? My money is on the former, but it's certainly a question worth pondering! 3. Ethereum is far more secure in an adversarial environment. 51% attacking Ethereum would require more capital than performing a similar attack on other chains.
yokem55 5y ago
Solana, beyond the extreme hardware requirements to run a node, is deeply economically centralizing. It's more or less a standard delegated proof of stake stake system with one nasty twist - validators have to pay transaction fees to vote. At current sol prices this is about $100,000/year. This has some very big implications in a dpos system. In dpos, a validator gets validation slots proportional to their delegation and staking level, and you earn the transaction fees paid in those slots. More delegation, more slots, more fees earned from users and from other validators voting on the correctness of the chain. The net effect is that if your validator has a delegation level below the average of all the validators, you will bleed out your capital over time to validators that have an above average delegation. To add a nastier twist to this, the Solana foundation in their generosity, contributes delegation out of their Sol allocation to validators that they like. Essentially, the foundation gets to decide who will be a profitable validator and who won't.

bhaak 5y ago

Wow, what a badly researched article. > Notably, EIP-4488 is a "short-term" remedy for Ethereum's sky-high gas fees. No, it would not be a remedy at all. The high gas fees wouldn't be reduced a lot by a reduction of the calldata gas cost. > Arguably, the main update that is expected to solve Ethereum’s scalability issue is the shift from proof-of-work (PoW) to proof-of-stake (PoS) mechanism. Another bad take. Changing the consensus engine does nothing for gas fees. Sharding is expected to do that but that is not planned to be introduced in 2022. What EIP-4488 would do is reduce the cost of Layer 2 (L2) solutions like rollups. Those need to commit their state hashes to the L1 blockchain. But those are currently somewhat expensive as well because of the high calldata gas cost. EIP-4488 might help with gas fees indirectly if it encourages the usage of L2 solutions which will then have less gas costs to commit to L1.

hanniabu 5y ago
Yup, they did a horrible job and it spreads more misconceptions.
chrisco255 5y ago
It would reduce the cost of rollup transactions by as much as 80%. And rollups are already 90-99% cheaper than L1, so I'd argue it provides a huge incentive to users and applications to migrate to L2, and helps relieve quite a bit of burden until sharding is released.
- toufka 5y ago
  Are rollups generally expected to be 'native' to etherium, or orthogonal - but packaged in a way that becomes well-integrated with L1? Or said another way, it seems like there are L2 rollup 'providers' - are these 3rd party providers inherent in an L2 solution, or are they features that will be subsumed later by the parent protocol?
  - everfree 5y ago
    Those 3rd party L2 providers are inherent to Ethereum's scaling roadmap. No need to ossify them or integrate them tightly with the protocol layer, they can remain modular and in free market competition on the smart contract layer.

officialchicken 5y ago

I love the idea that a fundamental economic problem (high demand) can be met with another half-baked technological solution. It's crypto comedy gold. Hint: speed up the timeline for the deployment of ETH2 / Proof of Stake if you want to lower gas fees - a.k.a. increase capacity beyond 10k transactions a day.

keymone 5y ago
proof of stake has nothing to do with transaction throughput.
- officialchicken 5y ago
  Yes, ETH2 does come with Sharding, but nobody really knows what that is. Proof of Stake is the ETH2 selling point.
  - keymone 5y ago
    sharding is a pipe dream. literally no different to just throwing your hands up, spinning up few more parallel ethereum networks and proclaiming you've solved a scalability problem.
    - serverholic 5y ago
      They are only sharding data. The execution layer isn't going to be sharded for awhile, if ever.
      - keymone 5y ago
        let's see what they actually ship, if ever.
  - chrisco255 5y ago
    Sharding is a very simple to understand concept and it's used in database systems today. Effectively, Ethereum's long-term data will become split across 4 partitions (which function as one chain). A validator would not be required to validate data on all 4 shards, they could validate across just one. Ethereum's execution will continue to be serialized while the data layer is parallelized. This allows the chain data to grow without excessive hardware requirements.

keymone 5y ago

from a guy that many years ago said that the more code a consensus algorithm has - the worse it is. and we've only seen more and more code, turning the knobs and coming up with workarounds, year after year.

serverholic 5y ago
Does this actually have anything to do with consensus? From what I understand the core consensus algorithm has stayed the same for awhile.
- keymone 5y ago
  seems like it does, because it changes block validation function.
rfd4sgmk8u 5y ago
Agreed. And it just gets worse. The latest generation of 'VC chains' are more complex again. One popular one even failed to produce blocks for 17 hours. Even when >50% of the miners were kicked out of Chinam Bitcoin didn't fail. It took a few weeks of slower blocks until the consensus agreed on a lesser difficulty. Complexity is the enemy of security. These systems just grow more complex and fragile as they progress.
- vmception 5y ago
  They just grow faster and get patched quickly. Bitcoin has had brief and temporary service failures a variety of times early on. A brief issue during a chain's first year of operation really isn't as damning as you think it is. There is a lot of immediate commerce right now which is awkward to disrupt, but just patch and move on.
  - keymone 5y ago
    exactly what i need from the foundation of a financial system, to grow quickly and patch bugs on the fly! what could possibly go wrong.

Zamicol 5y ago

Ethereum continues to promote designs that lower fees in the future. Users anticipate a more usable system in the future, even though it has very high fees at the moment. If Ethereum was not working on lowering fees, users would quickly migrate to another chain.

deleted 5y ago
[deleted]

deleted 5y ago

[deleted]

artfulhippo 5y ago

Gas fees have been too high since Cryptokitties in 2017. Actually, even before Ethereum launched, anyone with a calculator could have predicted the scaling issues. After all, bitcoin was never built for millions of consumers to transact onchain. And yet, Ethereum and Bitcoin have succeeded despite design flaws. It goes to show that you can do much better by serving a niche with massive demand (speculators, darknet users) than trying to build a Product for Everyone. I don't expect a Product for Everyone to come from the Ethereum or Bitcoin communities, communities rife with tribalism and whose insiders are billionaire ideological extremists, totally out of touch with normies. That much of the media coverage of crypto, such as this article, is inaccurate doesn't help matters; insiders increase their tribalism and anti-establishment angst, and outsiders increase their confusion. So I do hope that R&D into layer 1 and consensus tech doesn't relent. As it stands, the highest bandwidth chain (Solana) makes significant sacrifices in decentralization -- SOL is hyper concentrated in VC/whale/Core Team hands, and the Core Team plays a huge role as Kingmaker, picking winning projects to signal-boost -- and there is not yet a chain with reasonable bandwidth and PRIVACY. In the people's imagination, blockchain is a privacy technology. But in actuality, it's a panopticon. Until the gap from perception to reality closes, this market is ripe for disruption.

reginold 5y ago
What are your favorite cryptocurrency communities / projects?
- shill_cunt 5y ago
  algorand. Silivio Micali. enough said.
- monkeydust 5y ago
  Gridcoin and PowerLedger
- marcoslozada 5y ago
  We are working with many of them on Baas256.com … Solana, Poligon, BSC… and many more.

buckie 5y ago

Does anyone know where the actual latest design for ETH 2.0 sharding is? Whitepaper/repo because w/o sharding you can't scale layer 1, and if you don't scale layer 1, you can't address layer 1 gas costs. I've always been of the opinion that their sharding effort would fail, but I want to stay well informed. Sharding POS is very hard because the "trilemma" is correct for POS (kadena.io / explorer.chainweb.com being the example that the trilemma is solvable if you stick to POW). Layer 2/zk-rollups will only help successful dapp devs lower their gas costs (see: DyDx). It doesn't relieve the pressure on layer 1 as other apps/patterns move in until a new equilibrium is reached.

marcoslozada 5y ago
Yes: https://ethereum.org/en/eth2/ https://ethereum.org/en/eth2/

bob332 5y ago

Lol butterin must be one of the biggest crackpots in the world. The creator of a pointless mad product

benjamir 5y ago

This nonsense makes me want an explicit downvote. One day the HN crowd is pushing what a joke proof of stake is -- really? Who guessed so. The next day the newest newest crypto poop gets served on golden platters.