4 ms·

If I want to operate a service on top of the eth blockchain, I have to factor in gas fees as part of the operation costs. That's overhead.

pa7x1 3y ago
Saw this comment too late, sorry. Yes, that's overhead for the operator of the service. But this is not what I was referring to, nor the OP to which I answered. He made the false assumption that the gas fee moves up or down because node operators in the network reflect the costs to settle a transaction in the price, if the costs to them goes up then, he assumed, gas fees go up. This is not how it works. Node operators don't have a mechanism to reflect the costs to settle a transaction in the gas fee. Those two prices are allowed to float independently, then there are some mechanisms coded into the protocol that tend to produce equilibriums so that there is never too much disparity and the network remains profitable.
- Chabsff 3y ago
  But I'm also that OP whom you replied to and I never once mentioned that gas prices have anything to do with the cost of operating the blockchain. It's only people trying to tell me that the overhead is negligible who seem to be under the impression that low technical overhead means low overhead in general. Gas prices are evidence to the contrary of that.
  - pa7x1 3y ago
    Then you have not understood it. High gas prices are not evidence of high cost (as in the cost to the network to settle the transaction). In a bit analogous way high price of a luxury item is not evidence of its high cost of production. But instead of its desirability with respect to its abundance. Cost and value are two different things. Ethereum blockspace is in high demand with respect to its supply and that drives its value (gas prices), and this is irrespective of its cost to settle that blockspace (energy consumption, HW costs, etc...).

4 ms·

If I want to operate a service on top of the eth blockchain, I have to factor in gas fees as part of the operation costs. That's overhead.

by Chabsff 3y ago

pa7x1 3y ago
Saw this comment too late, sorry. Yes, that's overhead for the operator of the service. But this is not what I was referring to, nor the OP to which I answered. He made the false assumption that the gas fee moves up or down because node operators in the network reflect the costs to settle a transaction in the price, if the costs to them goes up then, he assumed, gas fees go up. This is not how it works. Node operators don't have a mechanism to reflect the costs to settle a transaction in the gas fee. Those two prices are allowed to float independently, then there are some mechanisms coded into the protocol that tend to produce equilibriums so that there is never too much disparity and the network remains profitable.
- Chabsff 3y ago
  But I'm also that OP whom you replied to and I never once mentioned that gas prices have anything to do with the cost of operating the blockchain. It's only people trying to tell me that the overhead is negligible who seem to be under the impression that low technical overhead means low overhead in general. Gas prices are evidence to the contrary of that.
  - pa7x1 3y ago
    Then you have not understood it. High gas prices are not evidence of high cost (as in the cost to the network to settle the transaction). In a bit analogous way high price of a luxury item is not evidence of its high cost of production. But instead of its desirability with respect to its abundance. Cost and value are two different things. Ethereum blockspace is in high demand with respect to its supply and that drives its value (gas prices), and this is irrespective of its cost to settle that blockspace (energy consumption, HW costs, etc...).