Ethereum London Mainnet Announcement
blog.ethereum.org
blog.ethereum.org
# miner only receives the priority fee; note that the base fee is not given to anyone (it is burned)
1: https://eips.ethereum.org/EIPS/eip-1559#eth-burn-precludes-f...
Regardless, I don't believe it will be deflationary long term. It will likely just last a year before it reaches an equilibrium.
Basically every random walk down the timeline leads to 100% of coins lost in the course of time.
This is of course separate from the decrease in rate of supply creation.
By time eth came out though everyone was much better about backing up wallets you thought would be worth nothing.
Rather, I believe it will result in the remaining 20% being held by a few exchanges, whose endgame will be to still charge the fees but just balance them internally without actually costing anything.
Friendly note that money supply is only correlated to whether a currency is inflationary or deflationary. Over the past weeks, for instance, Bitcoin has been inflationary--its purchasing power dropped.
Experienced users tend to gloss over this, because they've already taken the time to mentally model all the complexities related to the gas market. I predict that post-London, we'll see a huge wave of new users into a wide variety of applications in the ecosystem. I wouldn't be surprised if we see another order of magnitude increase in DeFi volume.
This priority fee is free money for the miner; the only reason they would not include your tx is because it would make their block slightly larger, which would make it propagate over the network slightly more slowly, and slightly increases the chance that the race is won by a different miner who discovered a block nearly simultaneously. So, the priority fee just needs to be big enough to make up for this tiny extra risk.
In fact, the incentive is negative for two reasons. Firstly because it helps the miners to set a price floor. Secondly, because the empty blocks reduce the burn fee, which opens up more of the demand elasticity to be captured by the priority fee.
I know there are all these armchair geniuses like Vlad and Roughgarden that are convinced it will work out a certain way. Sorry, but they don’t know squat until there’s real money on the line.
You can almost guarantee that zero-fee txs will be ignored, and the bigger the pools get, the more they can collude to set a price floor.
So please tell me again how this is any different at all from the current fee structure in the miner perspective.
Will anyone ever be able to answer the question "what will be the max number of ETH in circulation on date X?" ?
The only certainty in life is change. Saying "we will have x amount on date y" isn't helpful for developing coordination tools that will actually last into the future. Isn't it much better to have a system where we can say "this is how issuance will respond to these different possible futures".
Thank you for the platitude.
And then, there's Bitcoin with its perfectly predictable supply curve, which flatly derails your argument.
You have with no word said why one would want a predictable supply curve. Ethereum's supply curve is lower than it was promised in the ICO.
Just because Bitcoin has now a "perfectly predictable supply curve" that is no guarantee that it will be in the future? In a few years the block reward will be so small that the security of the chain will be reliant on the fees. A fee market has lots of negative implications, one of the worst is that you can pay miners directly to include transactions without using Bitcoin for the fees.
Bitcoin in the future is going to either be forced to introduce tail inflation in a hard fork, or start depending on secure external consensus (most likely ethereum) in a soft fork. Either option completely destroys any narrative bitcoin ever had.
This is how I did/do it on my Intel NUC running Ubuntu Server 20.04:
1. Download a prebuilt binary from https://geth.ethereum.org/downloads/.
2. Unpack it. Optionally make it (or a symlink) available in your PATH.
3. Create a service definition, enable it, and start it:
[Unit]
Description=Go Ethereum
[Service]
Type=simple
WorkingDirectory=/home/user
ExecStartPre=/usr/bin/bash -c "/usr/bin/systemctl set-environment GETH_EXT_IP=$$(/home/user/.local/bin/ext-ip.sh)"
ExecStart=/home/user/.local/bin/geth \
--nat extip:${GETH_EXT_IP} \
--ws
StandardError=append:/home/user/.ethereum/geth.log
PermissionsStartOnly=true
User=user
Group=user
Restart=always
RestartSec=5
[Install]
WantedBy=default.target
#!/usr/bin/env bash
dig TXT +short o-o.myaddr.l.google.com @ns1.google.com | awk -F'"' '{print $2}'
Note: the initial sync is intensive in both network and disk IO, you'll need an SSD. Also, running a full node long-term (without pruning) currently eats quite a bit of disk space:
$ du -sh ~/.ethereum/geth
598G /home/user/.ethereum/gethThere is various work to improve this, but the basic architecture does depend on random access storage to a great extent.
If you have craploads of RAM to allocate to ARC, you may actually be able to do it on ZFS I guess.
However I'm not confident it will be able to stay in sync afterwards using HDD.
You can do about 300 random access per second on a good HDD, which isn't enough to keep up with Ethereum's transaction rate, and each transaction needs quite a few of those each.
You can do about 300,000 per second on NVMe. 1000 times faster. That's plenty.
> --datadir.ancient /media/disk1/goethereum/ancient
I've been using it, and I have 225gb on my ssd, 229gb on my regular hard drive.
I'm running multiple mainnet ETH2 validators at home, in good company with nearly 200_000 validators worldwide (see https://beaconcha.in).
The teams behind the ETH1 and ETH2 node software (the latter has multiple independent implementations, while for ETH1 go-ethereum dominates the scene) are working hard to make "the merge" (PoS for mainnet) viable ASAP.
Disclosure: I work for status.im, but I'm not on the team responsible for nimbus-eth2/1.
Also how do you know the number of validators is correct? In other words can’t that be Sybiled?
https://launchpad.ethereum.org/en/faq
“””
How badly will I be penalized for being offline?
It depends. In addition to the impact of effective balance there are two important scenarios to be aware of:
Being offline while a supermajority (2/3) of validators is still online leads to relatively small penalties as there are still enough validators online for the chain to finalize. This is the expected scenario.
Being offline at the same time as more than 1/3 of the total number of validators leads to harsher penalties, since blocks do not finalize anymore. This scenario is very extreme and unlikely to happen.
Note that in the second (unlikely) scenario, you stand to progressively lose up to 50% (16 ETH) of your stake over 21 days. After 21 days you are ejected out of the validator pool. This ensures that blocks start finalizing again at some point.
“””
The penalty for missing one validation is small; the penalty for missing a block proposal is also not huge, but bigger than the penalty for missing a validation. Penalties would pile up over time if a validator is offline for an extended period.
Long story short: if you intend to run an ETH2 validator, you should be reasonably sure it will be able to run well-connected to the Internet for extended periods of time. Intermittent and brief periods of downtime would not have a substantial economic impact on your validator, but extended periods of downtime would be bad.
Why does this 32eth min exist?
For rolling back transactions, a 50% attack actually convinces the remaining honest nodes. For invalid transactions, even if you have 90% of the network, the remaining 10% of honest nodes will not follow the wrong chain.
This means anyone could detect this happening. At which point faith in eth will plummet, and so will prizes.
Because the two chains become inextricably linked together at that point, with the execution chain becoming entirely dependent on the beacon chain, we call that point the "merge".
So from that point on, new blocks on the execution chain - full of general Ethereum transactions - will be considered "confirmed" not because they include a difficult PoW calculation, but because the beacon chain has given that block its blessing (because stakers voted on it).
Democracy where one party wins every vote isn't really democracy.
Benevolent dictator works for software projects, but not for currencies.
If it's not majority rule, what would you suggest (for alt-coins, not for politics, I mean; though answering both is fine).
Politics-wise we can mitigate some of the effect by having proportional representation, but I'm not sure what the crypto-currency equivalent of that would be, nor really if it works as a concept.
That said im also not really sure what you would be asking for as a change to the process? Anyone is welcome to join the discussions, propose changes, defend them, code them. What would make it "grown up" and mature in your eyes? Also what "one party" are you talking about, a person? organisation? There are multiple eth client teams, and London has been one of the most discussed hard-forks there has been, 1559 has been in discussion and development for a few years now.
Im genuinely interested what would have to happen for you to see it as democratic? is it a question of sybil resistance? funding for teams?
If the project survives that, you can have a lot more confidence the project can resolve disputes with no key members being vital to the process.
Democracy currency is not novel. The US dollar in notes and digital form and other currencies created by democracies have existed for a long time.
It's probably because laws accumulate and don't expire. Getting rid of counterproductive laws is an action. Revolution is just an instantaneous loss of power. Maybe we should have a system with a continuous loss of power, the same way we have a money system with a continuous loss of purchasing power to prevent an abrupt loss of purchasing power.
https://ethereum.org/en/eth2/deposit-contract/
Also, at the present time, it's a good idea to run an ETH1 node locally, with your activated validator set to check it for blocks added to mainnet. You could instead use a free or paid Infura endpoint, but the extra latency may prove problematic.
Once activated, your validator would begin to earn rewards for making attestations and block proposals, etc. The APR is currently around 6% - 10%, depending on your validator's performance. Here are some stats for a validator I chose at random:
https://beaconcha.in/validator/72727
https://beaconscan.com/validator/72727
Running an unstaked/unactivated validator is not a bad thing to do, but there is no financial incentive to do so.
Simply saying "No I don't want to do that" isn't enough, you need to get together people to form at least one suitable alternative.
That's why the ethereum devs could maintain control of the chain and the Bitcoins couldn't.
Consequently the Bitcoin chain is not able to incorperate any innovations that would ever so slightly hurt mining profit in the short term even if it would be great for the ecosystem as a whole
Edit: What prohibits the leadership to do an arbitrary fork? How do cryptographic protocols factor the fact that leadership can just say 'no' and do the opposite and the chain will follow. Especially the word 'secure' in every coin looses it's meaning isn't it?
> The leadership can decide the rules of a new fork unless everyone else coordinate to oppose it?
You are 100% free to not install the latest upgrade on your node(s). Unless you have enough people who agree with you and coordinate their refusal to upgrade you will be a network of one that goes entirely unused. This is exactly how decentralization is supposed to work. You have to obtain some level of consensus to get anything done. This isn't a situation where "everyone" has too coordinate to oppose something, just "enough" people to form a fork that has enough hashpower/security to attract users. Even if a large enough minority of miners were able to coordinate a new chain, fork the code, make the necessary code changes and start their own version of Ethereum they still have to get people to use their network.
And then saying that most people support you because only small percent of people opted-out
They all on some level opted out of some of the assumptions in go-ethereum.
> Over 90 percent of miners (by hash power) are currently signaling support for SegWit2x.
At a certain point it was only blockstream and their reddit who really opposed bigger blocks, and it turns out that is sufficient to stifle Bitcoin progress.
https://en.bitcoin.it/wiki/New_York_Agreement this was the era if you are looking to do research.
https://github.com/bitcoin/bips/blob/master/bip-0009.mediawi...
https://github.com/bitcoin/bips/blob/master/bip-0091.mediawi...
Also see https://vitalik.ca/general/2021/03/23/legitimacy.html
The only thing prohibiting arbitrary forks is the risk of loss of trust in the leadership. And there's no guarantee of their long-term trustworthiness; what does succession planning look like among the dev team? What will you do when they retire?
Now that may turn out in the future to be revealed to be a sham, and the market will lose faith. But right now USDT only has market value because some segment of people believe in the promises made by the Tether Corporation. If I fork the chain, and I'm running a clone of USDT, and the Tether Corp says "there are no promises behind that token", then very clearly forked-USDT will be worth zero.
The only reason stablecoins work is because they have a mechanism where you can quickly 1. mint a new coin and sell it for slightly more than $1 for it 2. buy a coin for less than $1 and redeem it for $1 in value
Though this may happen in reality because of bridges (centralized/decentralized + permission/less): one asset is locked in a smart contract (or many smart contracts) on one chain, then minted in equivalent amounts on another, people will trade as if holds the equivalent value modulo liquidity for the bridged asset (as long as the locking/minting assumptions with the bridges hold true).
EDIT: I just realized the last letter in your examples are “A” and “B” to signify two versions of the same thing. My eyes aren’t what they used to be!
This is an interesting problem because it shows a fundamental flaw in blockchains. They only have authority over themselves. No wonder cryptocurrencies and their advocates are so self centered. Because nothing that exists outside their chain (even other cryptocurrencies) is graspable!
It's not trustless because the trust (in the algorithm) is still there, the difference is that they minimized the need for trust to the absolute minimum. It's no longer about how much you trust but about what you trust.
USDT claim (“Every Tether token is always 100% backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities (collectively, “reserves”).”) [1]
TrueUSD claim ("We work with independent third-party financial institutions to provide cash management for the underlying reserves backing TUSD tokens so that each TUSD token is backed by an equivalent amount of dollar deposits, cash equivalents, short-term government treasuries, or liquid investments. To achieve this, a portion of the dollar deposits backing TUSD are held in one or more depository accounts at our Banking Partners whose deposits may not be insured by the Federal Deposit Insurance Corporation (“FDIC”). [2]
Frax claim ("FRAX stablecoins can be minted by placing the appropriate amount of its constituent parts into the system. At genesis, FRAX is 100% collateralized, meaning that minting FRAX only requires placing collateral into the minting contract. During the fractional phase, minting FRAX requires placing the appropriate ratio of collateral and burning the ratio of Frax Shares (FXS). While the protocol is designed to accept any type of cryptocurrency as collateral, this implementation of the Frax Protocol will mainly accept on-chain stablecoins as collateral to smoothen out volatility in the collateral so that FRAX can transition to more algorithmic ratios smoothly. As the velocity of the system increases, it becomes easier and safer to include volatile cryptocurrency such as ETH and wrapped BTC into future pools with governance. ")[3]
The code change to defeat the code change is easy to make (just delete a section of code) but you have to distribute clients that ship with the difficulty bomb removed on top of EIP 1559 not being implemented, on top of people actually downloading the changed version.
Good luck trying to convince the Geth or other client teams to ship that version.
They've been working on staking and sharding for years and have shown no results on those fronts. This update is insignificant. This is not normal. There is something seriously wrong with the development process. IMO, they have been infiltrated by saboteurs and their project has become corrupted.
Unfortunately, this is not something which can be fixed. The corruption exists at every level of the project; all their developers and miners are happy to have an inefficient blockchain as it allows miners to collect high fees. The leaders of the project want to stretch out development as long as possible so that they can drain the Ethereum Foundation's coffers at a rate which won't attract the attention of regulators. The top developers are corrupt and just want to increase their salaries and get promotions by collecting dirt and using extortion instead of delivering results. They hire new people who they believe can be corrupted to join their side... As someone who works in the blockchain industry, I can say that it's a total mess in there. The more valuable the project, the more corrupt it is.
Power corrupts, absolute power corrupts absolutely. Money is power. Ethereum is money. QED.
They will never deliver anything meaningful. Never.
All these ERC20 projects force their community to pay between $10 to $20 per transaction to Ethereum miners who add no real value to their project/token. No real project based on real underlying value would force their users to pay such extortionate fees to some set of third-party validators who have nothing to do with their project aside from wedging themselves as middlemen between their tokens and their users.