Buterin Suggests Wallet Fee - Community Opposes

14 March, 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
Could Bitcoin have bottomed out?

Every similarity between Bitcoin and gold show that Bitcoin might have bottomed and is set for another spectacular rise. On the other hand, many people are lamenting the fall of Bitcoin and...

Open Source Crypto Frameworks

Square CEO Jack Dorsey wants to hire engineers, and he wants to pay them in Bitcoin and work remotely. These will be full-time positions, and the payment in Bitcoin is optional...

Top 3 Crypto Performers: Bitcoin Cash, Stellar, Cardano

The price movement of many cryptocurrencies in the market right now is encouraging. Some of these coins have passed through their low-level...

Prepare for the Altcoin Season

Although this is not investment advice, you can gain lots of actionable insight as we analyze the altcoin season. Many people often ask for tips on how to maximize their investments in this period...


ICO is Dead, Long Live IEO

IEO, which stands for Initial Exchange Offering, is a relatively new phenomenon that emerged in 2018. The primary difference between ICO, which for some time has been the customary...

TOP-10 Lightning Network Wallets

The successful implementation of the Lightning Network could become the next step towards the mass adoption of Bitcoin. However, in order to maintain this process, it is necessary to have...

New IBM Blockchain Global Payment Platform

The Big Blue has come up again with an innovative global payment platform on the blockchain. This time, IBM aims at simplifying global transaction for banks...

Japan releases new Regulations for Margin Trading

The financial regulators in Japan have come up with a new set of cryptocurrency regulations that will guide margin trading. The news was reported by the Nikkei...