Ethereum’s Upgrade Runs Into an Obstacle as Some Miners Try To Stop It

Fibo Quantum

Source: Adobe/J5M

The long-awaited Ethereum (ETH) improvement proposal (EIP) 1559 has run into its adversaries as a number of Ethereum miners banded together to prevent its implementation. It’s not yet clear, however, where the two of the largest pools stand on this issue.

Nine mostly smaller mining pools have joined the “STOPEIP1559” movement. There is a giant among them though, as they are joined by one of the three largest pools, Ethermine, by itself accounting for nearly 21% of the network’s hash power. Together, the nine’s power amounts to 28.1% in the past week.

Bitfly, the operator of Ethermine, tweeted that “Ethermine is against adopting EIP-1559 in its current state because we believe that Ethereum’s future may be at risk.”

On the other side, the website lists eleven pools, including the other two of the largest pools, Spark Pool and F2Pool – the latter two together accounting for some 36% of the network’s hash power over the past week, per Etherscan.

However, the ‘againsts’ are seemingly louder than the ‘fors.’ Save for a somewhat ambiguous tweet by Chun Wang, co-founder and administrator of F2Pool, there doesn’t seem to be any official announcements from either F2Pool or Spark Pool.

What’s more, there are some contradictory comments online, reportedly coming from Spark Pool, one of them suggesting that this major pool is actually against the proposal. Their Twitter comments may imply so as well. If that’s the case, Ethermine and Spark Pool would together account for some 45% of hash power.

We contacted Spark Pool for comment, while Qingfei Li, F2Pool’s Chief Marketing Officer, told Cryptonews.com that “there is no comment on that currently.”

The move to block the proposal comes after minor mining pool Flexpool announced earlier this month that they stand against the proposal, given that it would mean paying miners “significantly less for the same work,” that large mining pools control 51% of the network and can implement changes without the consent of miners, and that fees would be destroyed instead of paid to miners, they said.

Flexpool mined 11 blocks and ETH 28 in December, and has accounted for 0.04% of the hash power in the last seven days. Though tiny, it’s urging miners to stop supporting the pools which they say have the power to control the network, and stand against the EIP.

Ethereum's Upgrade Runs Into an Obstacle as Some Miners Try To Stop It 102
7-day moving average. Source: bitinfocharts.com

EIP-1559 is expected to bring automatic setting of fees and token burn mechanism for each transaction and an improved fee market – and it has been, generally speaking, highly anticipated within the ETH and the wider crypto communities.

This EIP is meant to help alleviate an issue that’s been troubling the network for a long time, exasperated by the growth of decentralized finance (DeFi): major congestion and high transaction fees. But it also prevents miners benefiting from unrestricted transaction fees. Per the current system, the senders who select to pay higher fees will draw the attention of miners and be dealt with sooner, while lower-fees one will be pushed down the list to wait their turn.

Meanwhile, Ethereum developer Micah Zoltu stated that “any censorship attack by miners against the interest of users will almost certainly result in the core developers taking very aggressive action against miners,” most likely resulting in the developers rushing to launch the proof-of-stake consensus mechanism, “which would completely remove all miners/mining from Ethereum.” He argued that, if the miner of the block received the base fee, there would effectively be no change with EIP-1559.

Developer Alex Stokes argued that not only should EIP-1559 not harm the viability of mining as a profession, but that “the upgrade strengthens ETH the asset which is a clear boon for miners.” ConsenSys Senior Product Manager Tim Beiko also went on to provide detailed explanations of user experience, economic and security benefits that he says come with the implementation of this EIP.

Meanwhile, Tim Roughgarden, an American computer scientist and a Professor of Computer Science at Columbia University, argued that “no transaction fee mechanism, EIP-1559 or otherwise, is likely to substantially decrease average transaction fees; persistently high transaction fees is a scalability problem, not a mechanism design problem.”

As reported, in August 2020, Anthony Sassano, SetProtocol product marketing manager, said that EIP 1559 could arrive by mid-2021. At the time, two clients were already running in a private testnet.

Per BitInfoCharts.com, Ethereum average transaction fee (7-day moving average) was USD 7.3 on January 21, down from USD 10 seen earlier this month. The price of ETH is USD 1,172 at 9:51 UTC Friday morning. It’s down 7.3% in a day and 4.4% in a week.
___
Learn more:
What’s in Store for Ethereum in 2021?
Ethereum In ATH Territory Against USD, But Far from ATH Against Bitcoin
Ethereum is Still an Unfinished Product, Says Bitcoin Investor Lyn Alden