Eip-1559: little harm, strong insult

The eip-1559 proposal makes a big circle and lists a lot of high sounding reasons. It claims to improve the user experience, but in fact, it cuts down the income of miners and enhances the status of eth. It is simply a model of selling dog meat with sheep's head.

The most controversial topic in the field of blockchain recently is probably the eip-1559 transaction fee reform proposal of Ethereum. After moving the bricks in hand, I can't help but complain.

The general meaning of eip-1559 is to allow the block to be temporarily enlarged (slack mechanism), introduce base fee which is adjusted according to the utilization rate of the block, and forcibly destroy this part of the fee from the handling fee of each transaction, and the remaining transaction fee is the tip to the miner.Details of the proposal will not be repeated here. Please refer to the eip-1559 proposalhttps://github.com/ethereum/EIPs/blob/master/EIPS/eip-1559.md
Eip-1559 claims the following design objectives:

L it is convenient for users (wallets) to set gas price for transactions.

L. the size of the block is allowed to change with the demand elasticity to alleviate the congestion problem.

(1) as a deflationary factor, balance the inflation brought about by the continued issuance of bonus blocks.

L to maintain the status of eth, the transaction fee must be paid by eth instead of other ways.

Reduce the risk of miners manipulating the order of Trading (so-called MeV).

Eliminate the motivation of miners to manipulate (bid up) transaction fees.

In my opinion, eip-1559 is not very useful to achieve the above stated objectives, but it implements the direction of Ethereum's overall shift to POS in the future, which can be said to be "not much harm but extremely insulting" to eth miners.

First of all, the functions of eip-1559, which are convenient for users to predict gas price and alleviate congestion problems, can not be said that there are preconditions for these functions to work.This premise is that the transactions on Ethereum are not too congested, that is, the throughput of Ethereum is sufficient on the whole, but the peak processing capacity needs to be improved in a short time. In this way, the transaction delay at peak can be reduced by expanding the block, and users can also avoid setting "too high" gas price according to the situation at peak.

However, a basic reality is that the throughput of Ethereum is not enough. Congestion is the norm. There are long-term transactions with a throughput equivalent to three hours in the transaction pool.With the development of applications such as profi, even if Ethereum runs at twice the current throughput, it will still be blocked.In the case of general congestion, the meaning of gas price is to compete with other users for the priority of packaging. Everyone subtracts a fixed rate. In addition to eliminating the transaction demand that can not afford this fee in advance, it will not make the "Involution" competition simpler or cheaper.

Secondly, the statement that eip-1559 helps to maintain the security of block rewards solves a non-existent problem.Because the continued issuance of block rewards mainly depends on the attitude of the whole system design towards inflation / deflation, and the priority is higher than the specific payment method, so in the long run, adding a deflation factor to eip-1559 will not affect the nature of the system.

Thirdly, the so-called function of reducing miners' manipulation of transaction order and transaction fee is not realized through eip-1559.At most, by increasing the transaction cost and reducing the number of transactions, we can indirectly reduce the operational space of miners by "killing the enemy 800, and losing 1000".

Finally, "maintaining the status of eth" is exactly the goal eip-1559 can achieve, that is, forcing users to use eth to pay transaction fees and enhance the use value of eth.As for the tip actually paid to the miners, it can still be paid by means other than eth as before.

Based on the above points, it can be said that the goal of eip-1559 will not bring about any actual improvement except to help eth "upgrade its status".Perhaps it can also suppress the demand for transactions because of the increased transaction costs, making Ethereum look a little less congested.

So why are there so many voices supporting eip-1559?Except for a small number of people who have not made clear the effect of the proposal, the rest may have to analyze the motivation from the perspective of profit.

For users, it is certainly not a loss.Eip-1559 adds the option that users can set gas price and tip actively. Users can at least adopt the same strategy as before. Setting tip and gas price as the same will not be more expensive than before.On the other hand, a large number of eth users can also benefit from the deflation caused by eip-1559.

For developers, whether core developers or ecological developers, adapting eip-1559 is just adding a few lines of code, which does not affect the program operation and user experience.

For miners, eip-1559 is a tax added out of thin air, which will greatly reduce the income of miners from transaction fees.The reason why Xinghuo mine is against it is very clear: "eip-1559 is the redistribution of wealth from miners to holders, which is a robbery against miners.".

We may as well make a relatively rough qualitative analysis (regardless of network and computation delay): in the case of sufficient transactions, as long as the base fee does not exceed 4 times of the reward that miners can get (assuming tip = gas price, this is base fee ≤ gas price * 80%),It is cost-effective for miners to pack blocks twice the size - at this time, according to the eip-1559 rule, the base fee will be increased by 1 / 8, and the miners will lose half of the reward in each transaction, and the doubled number of transactions will make up for the loss.Therefore, in the case of long-term congestion in Ethereum, more than 80% of the transaction fees will be burned directly.Miner's blood loss! A world where only miners are injured has been reached!

The rules of eip-1559 actually put miners into a "prisoner's dilemma" in game theory. The behavior of each miner to maximize his own mining income will raise the base fee and damage the interests of all miners.In the real world, the prisoner's dilemma of repeated games will lead the participants to unite, control the base fee in the form of monopoly Alliance (Cartel), and even deliberately do not use the block of increasing base fee dug up by miners outside the alliance.If the miners really establish such a monopoly alliance, it is certainly very unfavorable for the long-term development of Ethereum.

In my opinion, in the system of proof of workload, the reward for miners is actually the cost of purchasing the security services provided by miners for the blockchain ledger, which should be shared by all beneficiaries.The beneficiaries of a blockchain system include all users who hold assets on the chain, because the value provided by miners is more than just packaged transactions.Here, the relationship between users and miners is a bit like the "security guard" jointly employed by "owners" and them. The additional block reward is to collect "inflation tax" from all users and pay the miners wages.

If the security of the system is considered to be sufficient for the assets carried on it, it is not unreasonable to cut down the wages paid to "security guards".In history, the direct cutting of miners' awards is not new: bitcoin block awards have been halved many times, but with the rise of currency prices, the actual mining revenue and security have not decreased but increased. Ethereum has cut down block awards several times, from "5 eth" to "3 eth" and then to "2 eth", which is not the case today.Sincerely tell the miners to reduce production, leave and leave, less detours and waste of brain cells.

Originally, the miners were money making machines with no feelings. Even if the rewards were less, some of them would be driven away. As long as Ethereum did not collapse, the remaining miners would continue to dig.So supporters of eip-1559 are not worried about the miners forking into Ethereum.Considering that Ethereum's route of turning to POS has never been shaken, it is not necessary to care about their feelings if they want to abandon these POW miners sooner or later."If some miners leave, new ones can come. If 51% of miners attack, we will move to POS as soon as possible.」

However, the eip-1559 proposal goes around a lot and lists a lot of high sounding reasons. It claims to improve the user experience, but in fact, it cuts down the income of miners and enhances the status of eth. It is simply a model of selling dog meat with sheep's head.I think it's better to be honest and direct and respect your IQ.As pan Zhibiao said, POW miners have a very low status in eth ecology. 1559 can be said to have "little harm but strong insult" to eth miners.