ETH obsolescence?: how the metropolis hardfork allows important extensions to the Ethereum protocol - no transaction fees

in ethereum •  last year

The EIP86 makes it very easy to send transactions from an address without ETH. This allows miners to easily accept transactions that do not pay fees in ETH; opening up a world where users don't need to pay fees for their transactions. Does this obsolete ETH, primarily used for gas?



What exactly is happening

Ethereum improvement proposals (EIPs) are the standard method for defining new protocol specifications and features for the Ethereum network. Similar to the structure in Bitcoin, these proposals follow from draft, to accepted status as consensus forms on the proposal in the community. Accepted proposals are expected to be included into the next hardfork. The EIP86 that includes the features allowing for ETH free transactions has been accepted and should be included in the next Metropolis hardfork planned for the next month or two.

The EIP86 outlines the abstraction of transaction origin and signature. This change to the Ethereum protocol is part of the attempt to abstract account security from the standard ECDSA + nonce scheme used to currently secure accounts. This will allow for the use of more difficult ed25519 and Schnoor signatures, quantum-resistant signatures or whatever complex signature scheme users want. Ethereum is moving towards a future where all accounts are 'contracts' that can both pay for their own gas and define their own cryptography and security schemes. This makes Ethereum much more flexible as a platform and allows its consensus mechanism to support many more types of application on the public chain.

How fee-less?

The abstraction of the transaction origin allows transactions to originate from the 2^160 - 1 'anyone can send' address. In simple terms it allows you to send a transaction from nowhere; normal transactions must originate from your account or contract with ETH for the transaction gas (fees). By allowing transactions to originate from this 'entry-point' address, there is no ETH available for fees - by design. This allows miners to choose to include these transactions for reasons other than the associated gas. These transactions could be set up to pay miners in any other token or asset. The fees for these types of transactions can come from a number of different sources - not necessarily the transaction sender.

The owner of a contract could incentivize miners to mine transactions pertaining to the contract using their own means. Essentially allowing for application developers to pay for their users. This can enable a EOS like model to develop on Ethereum.

This gives miners more control over what transactions they wish to mine and for what cost. I see this feature allowing for very unique applications running on Ethereum with their own incentive structures for including transactions into blocks. If a miner is concerned about the free to use nature of a social network like steem, and that miner is compensated using built-in asset backed by economic game theory of the social network, the users won't need to pay for their vote transactions.

Does this mean my ETH is going to be less in demand?

A worry expressed by some is this EIP will cause ETH to be less in demand and therefore less valuable if it is not used to pay the gas fees for the network; nothing is obligating the use of ETH. This is a false worry. Ether will be the only token that can be used for staking on Casper POS when launched.

It does not make any sense to have a currency agnostic staking system. The type of consensus system that would be needed to support assets with independent fluctuations in their value is too complex and vulnerable to failure. The stake value of Ether will be determined by the value of all other transactions on the network, regardless of if they are in Ether or not.

Interestingly, most of this 0-ETH transaction utility is possible today. You can do most of above with a self-mined transaction or by doing an off-chain deal with a miner. Miners are free to include transactions of any kind they wish - even those without fees. EIP86 simply makes this easier and allows other miners to easily accept different types of transactions based on their client-side rules. Not everyone is able to mine their own transactions, however.

While miners are going to be free to accept whatever they choose in the future, the universality of ETH will likely remain a preferred method. On the ETH chain, all other tokens are essentially pegged to ETH values so I certainly expect many token markets to flourish against ETH. More transactions on the network, even if not directly using Ether will benefit the general network effect of Ethereum. ETH will always have utility over other tokens - even if that value is only staking.

Stay decentralized​​,
Kyle

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Thanks for sharing. What impact, if any, do you think this will have on Ethereum Classic?

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Well it depends on if they want to fork in these changes. There is not much development there so who knows if there will be any use.

Look at my previous posts for more info on ETC and why I am so pessimistic.

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I will definitely check out your previous posts on ETC and why your position is what it is. I've heard conflicting things with regards to ETC, but judging by it's performance over the past 3 months, I certainly don't thnk it's a coin to be ignored as most have been.

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Just riding the coat tails my friend.

well thought out, good research. thank you....upvoted and followed

Perhaps I missed something, but wouldn't this change allow users to spam the blockchain with transactions, possibly causing outages?

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Nope, not in any new ways. Blockchains are rather resistant to spam though. That is how the economics is designed.

This post received a 37% upvote from @randowhale thanks to @kyle.anderson! For more information, click here!

Umm, I invested a bit in ETH. Don't know whether to keep it or just diversify into other coins.
Anyways, helpful post. :)

nice information

Nice article

I really like reading your articles...

I guess this Metropolis HF will not affect the other companys involved on Ethereums platform??
I take it you still like Ubiq ?
Thanks Again for such great quility articles!!

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The HF should not effect any companies other than providing new APIs and features.

I don't support Ubiq, unnecessary fork of ETH with no development.

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Thanks Again for your insights into this!!

Holy shit, nicely-done on this post.

I don't grasp the more technical details of the blockchain back-end stuff so hadn't even bothered trying to figure out what was up with this latest update - though you summed up and simplified quite well.

Does indeed sound like a pretty big deal.

Thanks much for this. ;-)

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:) that means a lot! Thanks!

ETH is much more flexible than the EOS pumpers here want you to believe. The fact that Joseph gets 2k for a poorly put together bash post shows the state of this steem community.

Cheers! Keep writing your goodness!

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Hmmm... I feel conflicted looking at stuff like that, wondering if such would be a justifiable use of my downvote/flag - given the rewards do seem rather unproportional to the value of the post - or better to just sit on the sidelines, the market having spoken...

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Yeah I know exactly how you feel. I did not flag anything originally but I did flag the most recent post - the one I found truely deceptive. I have been struggling with flagging here for a while. I come from a strict game theoretic way of thinking. I gave some of my opinions in the post below but I have started to deviate from that way of thinking. I have embraced the lottery for the current state - as much as I absolutely disagree with how larger stakeholders are dealing with the platform. Several of my friends have turned away due to the poor quality of some of the heavy earning content.


https://steemit.com/steemit/@kyle.anderson/too-much-fluff-flagging-and-steemit-what-does-the-community-think-about-my-flagging-habits

Nice post @kyle.anderson I am new in this community and i am interested in cryptocurrencies and their underlying technology.... I am currently following you as i have looked at your profile and we have similar interests.... Kindly follow back! Thanks!

High quality ARTICLE