Ethereum wants to change transaction fees: The miners revolt

A planned protocol change with the designation EIP-1559 is causing controversy in the community of the crypto platform Ethereum. The change aims to introduce a new model of how the network collects user fees. The update is intended to ensure more predictable fees and also curb the inflation of ether, the developers explain. The change is expected to be implemented in July as part of the protocol update known as “London”. Numerous operators of mining associations are storming the project because they fear losses.

So far, users have added a fee to their transactions, which the miners collect in full along with the reward for a new block of data. According to EIP-1559 in future there should be a basic fee withheld by the network (“base fee”), which is then “burned”. In addition, the “tip” can still be given to the miners in order to accelerate the admission to a block. The new base fee would then be dynamically adapted to the network load. The volume of the blockchain blocks should also increase.

Miners obviously prefer the transactions of the users who have settled higher fees. So whoever pays more comes first; those who pay little have to wait. If there are numerous transactions waiting to be included in the next block, that naturally drives up prices. Currently, according to the service, the average fee is $ 7.90. In February alone, miners received the equivalent of around 1.37 billion US dollars from the network, reports the specialist service The Block. Of this, around 723 million US dollars were transaction fees.

In any case, numerous mining pools think little of it, the potential loss of income goes against the grain: On a protest website have they spoken out against the project. Opponents also include what are currently the largest pools, the Spark Pool and Flexpool, which, according to, currently account for over 43 percent of the total hashing power of the Ethereum network. According to the Coindesk specialist service the protest camp is likely to combine over 60 percent of the mining performance. The protesters have evidently received a considerable number of visitors in the past few weeks.

The critics accuse the developers of betraying the miners they would have initially needed for the success of their coin. The new fee model treats miners far too badly, and it may also open up security loopholes. “Instead of tipping the waiter, you burn it in front of his eyes and laugh at him”, said the Flexpool operator Alexander Sadovskyi in a statement. Therefore, the miners would have to team up and slow down the planned update.

Supporters of the update accuse the recalcitrant miners of not caring about the state of the network. The transaction costs have climbed to ludicrous heights in the past few months. The miners would gladly continue to pocket these inflated prices, at the expense of the usability of Ethereum.

In theory, the critics of EIP-1559 could weigh enough for a 51 percent attack. This describes the situation that one party unites the majority of the mining service and could thus also carry out malicious manipulations against the network. It would be conceivable, for example, that these miners would agree not to allow blocks to be entered in the blockchain according to the new rules for updates.

In the long term, however, it is more likely to result in a battle of retreat by the miners. Because mining should no longer have a future in the Ethereum network anyway: Instead of spitting out power-hungry hardware hash values ​​for a proof-of-work, the entire system should be converted to proof-of-stake (PoS). In this process, the use for the competition for block entry in crypto money is made. This is paid into a smart contract and retained there. The PoS blockchain called Beacon. The beacon chain and the current PoW chain are to be merged at some point in the future.

On Proposal from Ethereum inventor Vitalik ButerinHow this merger could possibly also be accelerated is already available. Some observers also see this as a message from the developers to the miners that they don’t take a step backwards. It remains to be seen whether the parties will find a compromise. It is currently clear above all that Ethereum should have some extremely exciting months ahead of it, until the planned update in July.


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