Vitalik Buterin, the creator of Ethereum, proposed a new structure for transaction fees before he stepped down as Ethereum’s chief scientist. The plan shifts power away from miners and instead puts it in the hands of those participating in the network. This means that blockchains with more users will have less control over their transactions fee costs.
The “ethereum creator” is Vitalik Buterin, the creator of Ethereum. He has proposed a new structure for transaction fees on the Ethereum network.
Many people have already been turned off by Ethereum’s exorbitant gas prices, and although the project has attempted to fix the problem in the past, the remedies have been ineffective. Vitalik Buterin, the project’s co-founder, has now proposed a new fee structure in an effort to enhance the network’s procedures once more.
The co-founder of Ethereum wants to modify the gas cost system.
Buterin released a paper titled “Multidimensional EIP-1559” on January 5th. He noted that various resources inside the Ethereum Virtual Machine (EVM) have varied gas use requirements. Buterin went on to say that the EVM had distinct constraints for “burst” capacity vs “sustained” capacity. Witness data storage, block data storage, block state size changes, and other similar scenarios are examples.
The issue with the existing gas pricing structure is that it is ineffective at detecting and addressing these disparities. The discrepancies are not taken into consideration when computing the gas cost since all resources are pooled into a single multidimensional resource known as ‘gas.’
When all of the diverse resources are combined into a single one, the gas costs that result are sub-optimal. Buterin believes that resolving this problem would help to improve things, thus he presented a pretty complicated solution in his proposal. To put it another way, Ethereum’s co-founder presented two possible solutions that might be implemented using “multidimensional pricing,” as he described it.
Buterin suggests two options.
The first of Buterin’s two solutions is to determine the gas cost of resources by dividing the base charge for each unit of resource utilized by the total base fee. The base cost is already included in the EIP-1559 algorithm as a fixed fee.
His second approach, on the other hand, is perhaps more difficult. This alternative suggests a basic price for consuming resources, as well as burst restrictions for each resource individually. He also recommends introducing “priority fees,” which would be computed by increasing the basic cost by the percentage.
Buterin is well aware that his multifaceted fee structure solutions aren’t without flaws. He also listed the disadvantages, adding that the major difficulty would be that block builders would no longer be able to accept transactions as they have in the past, sorting them by fee size. They’d have to balance the dimensions and complete extra arithmetic problems instead.
The Ethereum network is now focused on the next major update, thus its position on the new proposal is unclear. The network’s next step will be a “merge,” in which Ethereum’s blockchain will connect to the Beacon Chain, thereby ending the usage of Proof-of-Work. While the specific date and timing of the relocation are uncertain, it is expected to happen in the first quarter of 2022.
Visit our Investing in Ethereum guide to learn more about this coin.
Watch This Video-
- ethereum transaction fee
- what are ethereum gas fees
- is ethereum limited supply