Miners would migrate from Ethereum if proposal supported by Vitalik Buterin is implemented

A new academic report pointing out the potential benefits of implementing EIP-1559, is supported by Vitalik Buterin even though Ethereum miners are not very happy with the proposal.

Vitalik Buterin praised the report written by Tom Roughgarden, Professor of Computer Science at Columbia University. The developer took advantage of the publication of the updated Ethereum roadmap to, from Twitter, call to work the Ethereum 1559 Scalability Proposal, with a view to implementing it on the main chain in the future.

However, last October, in a survey conducted by Roughgarden, miners further warned that, if EIP-1559 is implemented, they could migrate to another chain with which they share an algorithm, abandoning Ethereum. In this way, Buterin again insists on a scalability solution that it was rejected by 86% of the processing power consulted on that occasion.

Migrating miners could lead to network congestion and security issues, similar to the 51% attacks Ethereum Classic has suffered in recent months.

All or nothing: miners refuse to implement EIP-1559

Roughgarden published the results of a consultation with the community last October, where it was determined that, excluding miners, 60% of the participants support the implementation of the EIP-1559 proposal.

However, almost all the miners surveyed stated that EIP-1559 would affect them negatively. In fact, 86% of the miners surveyed refuse to implement this proposal and warn that they could go to mine another chain.

Almost all miners surveyed mentioned that EIP-1559 would negatively impact them and that they would consider mining a blockchain other than Ethereum if implemented. Some suggest that it would be better if EIP-1559 were part of Ethereum 2.0, exclusively. Other concerns include the negative association between miners attacking the network, miners not updating their clients to support the EIP, and the risk of mining centralization if smaller miners are kicked off the network.

Tom Roughgarden, analyst and professor at Columbia University.

Ethereum miners are concerned about a change in the network’s commission calculation mechanism. Source: WorldSpectrum / pixabay.com

It is not sure how long the activation of Ethereum 2.0 will actually take, which already has more than 700 million dollars deposited for staking. With Ethereum 2.0 missing two years, according to estimates, configuring the network to successfully add EIP-1559 may hamper overall project development.

Buterin endorses this proposal as a fundamental piece to scale Ethereum. In fact, it has been one of its main promoters throughout the year, after publishing its reasons for implementing EIP-1559 a few months ago. In the post, Buterin mentions the characteristics that Roughgarden also includes in his report.

In the recent report, Roughgarden points out that the update process is susceptible to technical errors and accidents, something that should be taken into account before activating EIP-1559 due to the delays that can be generated.

As reported by CriptoNoticias, the successful implementation of EIP-1559 could take up to 1 year, as estimated by a developer at the Ethereum Foundation. This time was not officially confirmed by Vitalik Buterin or the foundation itself at that time.

What brings EIP-1559 back to Ethereum?

In general terms, EIP-1559 proposes to change the mechanism with which the commission of a transaction in Ethereum is determined.

As explained in the report, currently each Ethereum transaction pays the base price per transaction. This commission is transferred from the issuer of the transaction to the miner who includes the transaction in a new block of the chain.

In EIP-1559 the base price per block will be destroyed or burned. It will also be governed by supply and demand to include transactions in the blocks as a priority. The lower the demand, the lower the commissions, the report explains.

The primary conclusion of the report is that while EIP-1559 can help reduce high transaction fee prices, by itself it will not represent a definitive solution to this problem.

Roughgarden aims to improve Ethereum’s structure to reduce fees, rather than applying lesser mechanisms for this purpose. The professor refers to the fact that deflationary methods could be implemented to help reduce the final price of commissions.

“Reducing the market compensation price by increasing or reducing demand is fundamentally a scalability problem, and not a design problem in its mechanisms,” he says.

It is worth noting that the clearing market price is understood as the top price of operating a market when supply and demand are in equilibrium.

The professor admits that EIP-1559 could possibly help to “modestly lower” Ethereum’s inflation rate, by destroying (burning) the base amount of each transaction.

Ethereum’s current inflation rate is just 4% (yearly). If the transaction fee continues to increase, and a significant part of it is burned, the inflation rate will decrease and could turn negative. In any case, since the commissions destroyed are in a way a refund or refund for ETH holders, the value of ETH could be directly tied to the intensity of network use. Additionally, since the destroyed commissions must be paid in ETH on the main network, ETH is provided with a new practical functionality.

Tom Roughgarden, analyst and professor at Columbia University.

Roughgarden also believes that block size flexibility, which will be added by EIP-1559, will help reduce variability in transaction fees. However, he points out that this opens up an attack vector in the possibility of saturating the network by emitting many large blocks, although this would be costly for the attacker.

Likewise, it indicates that the EIP-1559 will help to estimate with more precision the ideal price of the commissions per transaction, regardless of the suggested amount given the high network congestion.

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