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Gas fees are denominated in GWei but they are not fixed in a set amount of GWei. What you are implying is like saying that because someone paid 3903 ETH for a B

by pa7x1 5y ago

Gas fees are denominated in GWei but they are not fixed in a set amount of GWei. What you are implying is like saying that because someone paid 3903 ETH for a Banksy painting [0], then when ETH price goes up the price of the Banksy goes up. We don't think of it this way, right? We think the Banksy has a worth set independently of the price of ETH even if it was sold for certain amount denominated in ETH. Same thing happens with blockspace (the resource sold by the Ethereum network), it's paid in ETH but its worth is whatever the market is willing to pay for it, ETH is just a unit of account. In particular, if you want to do a transfer to pay for a coffee and the gas prices of the last few blocks would mean you would pay more than the coffee is worth, you wouldn't make the transaction, right? So you are priced out of the network because you are implicitly thinking of the worth of your transaction in USD terms and the transaction fees in USD terms. Most people think like you, they have a value they are willing to pay for the network fees and thus the market as a whole finds a value for the available blockspace. PoS is not more centralizing than PoW. I explained this in detail in another post: https://news.ycombinator.com/item?id=29390152 https://news.ycombinator.com/item?id=29390152 Feel free to counter the points made there. [0] https://www.coindesk.com/business/2021/11/19/banksy-paintings-sell-for-3093-eth-in-auction-house-first/ https://www.coindesk.com/business/2021/11/19/banksy-painting...

camgunz 5y ago
Yeah, to distill what you're saying (lmk if I'm still misunderstanding), GWei is ETH, but looking at it relative to USD (or whatever fiat) is wrong. That's where I disagree, because electricity and equipment is denominated in fiat, and the whole system is an electricity/equipment (in fiat) -> ETH conversion system, so the relative price of ETH to fiat is beyond relevant, it's the whole idea. No one would do this if ETH were worth less than the fiat needed to make it (promise of future worth aside). And yeah, I do think probably most people still think in fiat, so if you kind of elide all of the ETH/GWei steps and say: > Hey, buy a mining rig for $2k, you'll make $60/day after electricity costs, you'll make your investment back in a month and after that it's pure profit That's all people care about, and rightly so. If, on the other hand you say: > Hey, buy a mining rig for $2k, you'll lose $10/day after electricity costs... that's it That's not super appetizing right. And the only way the system makes fiat is if ETH is worth fiat. You can't abstract it out of the system, it's the only reason the system is relevant at all.

by pa7x1 5y ago

camgunz 5y ago

Yeah, to distill what you're saying (lmk if I'm still misunderstanding), GWei is ETH, but looking at it relative to USD (or whatever fiat) is wrong. That's where I disagree, because electricity and equipment is denominated in fiat, and the whole system is an electricity/equipment (in fiat) -> ETH conversion system, so the relative price of ETH to fiat is beyond relevant, it's the whole idea. No one would do this if ETH were worth less than the fiat needed to make it (promise of future worth aside). And yeah, I do think probably most people still think in fiat, so if you kind of elide all of the ETH/GWei steps and say: > Hey, buy a mining rig for $2k, you'll make $60/day after electricity costs, you'll make your investment back in a month and after that it's pure profit That's all people care about, and rightly so. If, on the other hand you say: > Hey, buy a mining rig for $2k, you'll lose $10/day after electricity costs... that's it That's not super appetizing right. And the only way the system makes fiat is if ETH is worth fiat. You can't abstract it out of the system, it's the only reason the system is relevant at all.