Buterin Suggests Wallet Fee - Community Opposes

March 14, 2019

Sometimes a single Tweet can sparkle a heated discussion that can even make a news headline. That’s exactly what happened when Vitalik Buterin, one of the founding fathers of Ethereum platform, published, what seemed to him, a reasonable suggestion that the developers of Ethereum wallets should impose an additional fee in the amount of 1 gwei for each transaction that is carried out by the virtue of the wallet. He argued that this rather insignificant fee would be immensely beneficial for the developers' community to the extent that it would make it self-sufficient thus relieving from the dependency on the direct funding from the Ethereum Foundation. Although this proposal would make a logical sense from Buterin’s point of view, it was met with quite a ferocious opposition from the community of users as well as from some developers of the Ethereum wallets. Changpeng Zhao also didn’t squander the opportunity to give his two cents on the matter.

Vitalik says, let the users support the developers now


In his semi-scandalous Tweet, Buterin hinted that he is inclined to initiate amendments to the Ethereum protocol that would facilitate the implementation of fees which would translate into the increase of gas cost for the average Ethereum user by as much as 7%.

Just a quick reminder, gwei or nanoehter, in the denomination of the native coin (ETH), with one Ether being equal to a billion gwei. The cost of gas, another unit of the Ethereum network that refers to the cost of computation capacities required to perform a transaction or to execute a smart contract, is calculated in gwei.

The bigger is the transaction, or the more complex is the smart contract, the more gas volume it would require to be executed properly. The cost of gas per transaction is, basically, the amount of gwei that the user would have to compensate to the network for the expended computation power.

Currently, the developers of the Ethereum wallets are presumably being given a free hand with regard to charging fees whilst some dApp users have been figuring out the ways to avoid paying gas for transactions.

Buterin suggests that each ETH wallet should begin charging the fee of one gwei per transaction thus preventing users from evading the payment and opening the window of opportunity for the developers to become self-funded. Apparently,1 gwei should be a flat fee for any transaction irrespective of its volume. Granted that the price of 73 thousand gwei is about $0.01, the proposed fee appears to be a miserly sum. However, according to Vitalik’s calculations, it would amount to as much as $2 million per year. This money would be used to financially maintain the developers of Ethereum wallets thereby freeing from the necessity to compete for the grants from the Ethereum Foundation. 

The community responded in a not so cordial manner


As one could expect, Vitalik’s followers didn’t greet his proposal with enthusiasm, which is quite understandable because it is inherent to human mentality to be dissatisfied when forced to pay for something that is seemingly free. However, they were right to mention the instance when MultiBit, a desktop Bitcoin wallet, tried to impose a similar fee, backing it up with a similar argumentation, but to no avail. Some users even joked that soon the Ethereum network would be used by governments to collect VAT. Even Changpeng Zhao, the CEO of Binance, got involved in the discussion by posting a succinct Tweet that said, “Don’t think this will fly.”     

Cryptocurrency: Ethereum

Estonia's Toughened Crypto Regulation Causes Uproar
Estonia's Toughened Crypto Regulation Causes Uproar

It appears that the time when many blockchain projects pinned high hopes on Estonia as a new crypto haven are over. Once being considered...

Three Utility Tokens Deserve Attention
Three Utility Tokens Deserve Attention

While ICOs are losing their sheen and more projects are moving to an STO issuing model, there are still some gems hidden out there for the astute investor to find...

ICO Value in IP Free World
ICO Value in IP Free World

There are a few components of blockchain technology that go without saying. First among them is decentralization so that no central authority can control the data that runs through the network...

What needed for tokens to appreciate value?
What needed for tokens to appreciate value?

What makes a token valuable? This is a conversation that doe snot happen as often as it should, particularly considering the drastic failure rate of ICOs and how the tokens even from...


Poloniex plans to delist 9 tokens
Poloniex plans to delist 9 tokens

SEC's regulatory actions against unregistered tokens are causing an uproar in the US crypto industry. Nine of the tokens will no longer appear on the Poloniex platform, including DCR...

Community: The Key Ingredient To Every Successful ICO
Community: The Key Ingredient To Every Successful ICO

There are many things that can influence an ICO directly. The technology the project, token or coin is based on being one. Another is the idea...

Your ICO Has Ended
Your ICO Has Ended

Your ICO has done well; you now have your crypto wallets stuffed full of Ether, Bitcoin and Litecoin (and whatever other currency you accepted as a swap for your own tokens). You now finally have...

Year of Repair as ICOs Trend Towards Zero
Year of Repair as ICOs Trend Towards Zero

It seems that 2019 will be the year of repair for ICOs, which may stop existing at all. That is what two prominent analysts in the cryptocurrency industry seem to think...