Wednesday, March 20, 2019

Vitalik Proposes A Raise In Transaction Fees, Gets Backlash From Community

Vitalik Buterin, the co-founder of Ethereum network, proposes a new crypto wallet fees to the crypto community on the 8th of March via a post on Tweeter. This he proposes to be a “sustainable” way to fund cryptocurrency wallet developments: a tiny per-transaction fee that goes to the wallet’s developers. This, unlike his usual proposals, got a backlash from the crypto community.

The Proposed Fees

The Ethereum co-founder’s tweet stated that, “I propose we consider supporting a community norm that client/wallet devs can/should charge a 1 gwei/gas fee for txs sent through their wallet, we don’t try to circumvent such fees, and we support protocol changes to make such fees easier (e.g., abstraction enabling multisends)”

Vitalik, explaining, said that the fee should be the smallest unit of ethereum and should be a flat free rather than a percentage so as not to create a perverse incentive not to optimize gas fees. He envisages that there should be a transaction threshold, such as 1 million GAS used to send transactions within the wallet.

Also, Vitalik argued that the fee would rise to $2m per year in sustainable non-institutionally-based market-based funding for clients and wallet developers. Though this is not about mandatory fees, wallet developers would have the option of continuing to charge zero fees.

Meanwhile, at the protocol level, the Ethereum network has to circumvent these types of fees for the scheme to work. Ethereum would also attempt to make it easier to charge such fee through protocol development, such as in “abstraction enabling multisends.”

Buterin thinks a fee this low would not bother most users. He also points out that it would essentially match grants given by the Ethereum Foundation.

Twitter Users Reacts

Against his view, this bothers most users. A Twitter user noted that “When are you implementing government taxes hardcoded into the protocol?”

Also, another stated that “Today is x% for this, tomorrow for that and sooner or later a whole mechanism is ready to allow gov to collect VAT or cover their irresponsible spending.”

Crypto Software Development Fee

Crypto software development has often been aided by brilliant developers working on a volunteer basis for creating software that enables the movement of billions of dollars in the cryptocurrency industry. However, even the largest blockchain development companies have limited resources when it comes to hiring people, while intellectual capital is also scarce.

Vitalik’s proposal is not new. Previously, he had suggested introducing implementing an EOS-style account creation fee as well as fees for storage on the network. EOS has a fee associated with establishing an account, just like many bank accounts do. It’s one of several ways that EOS differentiates itself from Ethereum and other smart contract platforms.

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