As Ether transaction fees hit 100 gwei, the project’s co-founder warns that a failure to respond could undermine the security of the network.
Ethereum (ETH) co-founder Vitalik Buterin has called for reform to the cryptocurrency’s fee system, warning that rising transaction fees could undermine the security of the network.
The idea is based on a paper that suggests miners’ increasing reliance on transaction fees may incentivize selfish mining practices in a bid to extract greater profits, risking disruptions to how transactions are processed.
Buterin’s comments come as users report Ether transaction fees tagging 100 gwei. Mythos Capital founder Ryan Adams tweeted earlier today that the Ethereum network must “find ways to fit more value in each block.”
Buterin is advocating for the implementation of Ethereum Improvement Proposal (EIP) 1599 to reform Ethereum’s fees. It involves burning base fees to reduce miners’ reliance on transaction tariffs. However, some in the community are yet to warm to the proposal.
Vitalik urges EIP-1559 adoption
Buterin’s post cites the 2016 paper titled On the Instability of Bitcoin Without the Block Reward that was authored by four researchers from Princeton University, outlining the risks associated with increasing transaction fees.
The paper sought to warn against several threats to Bitcoin’s (BTC) performance and security that may arise as miners become increasingly reliant on transaction fees as block rewards dwindle over time.
The researchers state that a high variance in transaction fees could incentivize “selfish” mining practices as block rewards dwindle, predicting that miners may attempt to fork “wealthy” blocks to steal the rewards contained within them.
Ethereum community cautious
The EIP-1599 proposal would see an increase in total network capacity to 16 million gas, up from 12.5 million currently, with base fees moving up or down based on whether capacity is above or below a target of 10 million gas. Miners would only keep tips paid to prioritize transactions, while the base fee would be burned.
The Ethereum community is far from finding consensus in support of EIP-1559, with Ethereum Name Service founder Nick Jonshon tweeting: “I know I’m a bit of a broken record on this count, but aren’t you concerned about the lack of any formal analysis that shows 1559 behaves as intended?”
Concerns have also been expressed regarding the potential for miners to manipulate base fees. Developer Fernando Nieto also criticized the 2016 paper cited by Buterin, arguing that its underlying assumptions are flawed.