ethereum/EIPs

EIP 858: Reduce block reward

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cslarson commented

EIP: 858 is a proposal to reduce the block reward to 1 ETH.

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The EIP itself puts forth a case for the implementation of this proposal. Below, I'll summarise arguments against this proposal, along with counter-arguments.

  • Proof of stake will eliminate mining entirely
    • A full switch to POS is still some time off. Even without growth in hashrate the environmental costs are significant and should be mitigated for the time until POS is fully operational.
    • Reducing prior to the switch may ensure a smoother eventual switch
    • It's prudent to curate a backup plan to a smooth switch to full POS
  • This would be a distraction
    • The technical implementation of this proposal would require minimal work (please correct me if this is wrong). I would suggest a hard fork block be proposed (suggested name: Perinthos), along with optional toggles in the clients, such that users would have a choice between a 1 ETH/block chain and a 3 ETH/block chain. I believe this could be achieved with minimal fuss and within a relatively short space of time.
  • The block reward has already been reduced without corresponding reduction in hashrate. The evidence we have suggests this will not even work.
    • This price went up for unrelated reasons which counteracted the decline in block reward. The block reward remains the primary means to reduce the incentive to mine.
  • GPUs will just mine on other POW chains. This won't do anything for the planet.
    • This proposal would cause a non-negligible reduction of total crypto demand for GPU mining.
  • Miners use clean energy sources
    • Even if all mining was done via renewable energy, that energy could still have been used elsewhere, to replace "dirty" energy, so still represents an opportunity cost.
  • Miners will attack the 1 ETH/block chain to prevent its adoption.
    • There is no guarantee, and little evidence to support the idea, that Ethereum miners would take an aggressive action like this rather than: a) support the new chain, b) cease mining activity, or c) switch to mining other POW chains.
    • From an ethical standpoint, the possibility of an adversary to an action should not prevent taking that action.
3esmit commented

The EIP mentions a security risk in high mining hashrate. Can you explain?

The complexity is in community consensus, not code.

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cslarson commented

The EIP mentions a security risk in high mining hashrate. Can you explain?

The demand the Ethereum network creates for mining now has a significant affect on the market for GPUs: stimulating supply as well as the conversion from other purposes to mining. While (productive) mining secures the network, the threat mining is securing the network from is other (adversarial) mining. Once hashrate has reached a point at which costs of an attack are prohibitively high, further growth in hashrate is counter-productive as it also grows the pool of potential adversarial miners. A country that wants to defend itself should have an army only big enough for that purpose. Any further growth in the size of that army only seeks to contribute to a growing existential threat: new recruits are potential deserters to adversaries, and demand resources while remaining unproductive to the purpose of defense.

The complexity is in community consensus, not code.

As you point out, from a technical standpoint, this is a straightforward task. Putting the choice forward is simple and can be accomplished with minimal fuss and distraction. Users will then be able to chose which chain they want to interact with and miners will support either based primarily on profitability of each. Any potential subsequent aggression by any party is then of course up to that party. There is so far little evidence that such aggression would take place. Some miners would likely support the new chain (because it would be profitable to do so after an adjustment in difficulty), some would more to other profitable POW chains, some may cease mining operations, and yes some may want to act aggressively but there is a good possibility that any attack could be defended against (attack not big enough or too expensive). It is worth taking the (easy) steps to put the ball in those potential attackers court. It is the least we can do when the environmental costs are so high (and growing).

As a side not to the inital question regarding security: of course security is paramount to the protocol, right. It's in there somewhere as a factor. But the protocol, like, it seems, most other economic systems, has a difficult or impossible time factoring in external costs such long term environmental costs. It's then up to a system's beneficiaries to chose what the factor is for those external costs. The factor is there, and chosen by us, regardless of our acceptance of that fact. My point is that we can chose to make the environmental costs associated with the method of securing our network a significant enough factor to warrant a certain course of action.

3esmit commented

Users will then be able to chose which chain they want to interact with and miners will support either based primarily on profitability of each.

This looks like those many Bitcoin forks which just change some parameters and then you create "money" out of nothing, then whales can be happy to sell that clone token for the original one and become bigger.
I think PoS is eminent and will solve energy waste problem in state of art.

cslarson commented

This looks like those many Bitcoin forks which just change some parameters and then you create "money" out of nothing, then whales can be happy to sell that clone token for the original one and become bigger.

It is not my intention to propose a fork that would result in two chains that would continue forever, but that the 1 ETH chain would supplant the 3 ETH chain. If the new chain garners sufficient levels of mining support then there is good reason to believe that users would adopt that chain.

I think PoS is eminent and will solve energy waste problem in state of art.

In the week since I made the r/ethereum post hashrate has increased over 10% from ~200TH/s to 221 TH/s. That 10% correlates to a (baseline) roughly 100,000 additional metric tons of CO2 per month (current baseline rate 1.1MTonsCO2/month). The energy consumption is dispersed around the globe, but the aggregate affects are real and over the course of the time between now and the introduction of PoS is still a significant contribution to global carbon emmisions which we have all the power to at least try to limit. It's also just not prudent to plan with the expectation that all will be on time and 100% smooth with regard to PoS.

A graph of hashrate & price.

Edit: There was an error in the calculation of CO2 per month. See here. I divided by 0.527 rather than multiply so the corrected figure is approx 1/4 of the figure stated here.

HodlDwon commented

From this discussion (11 months ago): https://www.reddit.com/r/ethereum/comments/5x926o/gas_price_market_not_properly_working_dear/

There seems to be an economic case for reducing transaction fees by reducing the regular block reward relative to Uncle blocks. As explained in the linked thread, this is because as Miners include more transaction in their blocks, they risk producing and Uncle and losing out on the full block reward; since larger blocks take more time to process and/or propagate through the network.

I agree with the original proposal that an issuance reduction fork like Perinthos could be contentious and should absolutely not be bundled with other random "feature improvements" like what might be included in Constantinople. However with that said, there may be other lingering EIPs or community suggestions that are more economically motivated that would be a good fit for a Perinthos fork.

For example, we can reduce issuance and also make an adjustment to the Uncle mechanics that incentivizes Miners to raise the GasBlockLimit from today's 8,000,000 to perhaps 15-20MM; that could be a worthwhile effort and good for everyone (Miners, Devs, Users, PC-Gamers, etc.) prior to full-Casper and other more advanced scaling solutions that aren't expected to be ready for 12-18 months from now.

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cslarson commented

I apologise I made an error in my previous calculations of CO2 contribution from mining by dividing by the CO2/kwh (0.527) rather than multiplying. This spreadsheet now contains the relevant calculations, conversions, and sources to arrive at a daily network CO2 contribution of 10,000 tons.

kybarnet commented

Last time I brought up block reward Alex and Nick effectively kicked and banned me out of the Ethereum community :P This is what I proposed... 9 months ago. Yes, that's 9 f-ing months ago.

I made a lot of 'top voted' posts regarding the issue, got onto Crypt0 news with Omar, etc. Nick and Alex REMOVED my posts claiming I WAS MAKING A MEME.

I spent 120 hours over several months making my contribution to the Ethereum protocol, only to have Alex and Nick ban, delete my posts, and report me for meme'ing about price. This caused a lot of fights with the Ethereum team, as Vitalik wouldn't reign them in and allowed them to control 'acceptable' discourse.

Eventually, Hudson allowed me a brief period of time on the Dev Call, in which I argued with Vitalik regarding reward. Ultimately Vitalik did not disagree with anything I stated, and was well informed of the issue. Alex - seriously - reprimanded me because his buddy who is some serious mining troll wouldn't get on the call, and Alex said that was my fault. He told Hudson, Vitalik, and me that I shouldn't be allowed to speak, if his troll buddy refuses to participate, also.

When you tackle the mining issue, it's not just black and white. I mentioned to Vitalik and Vlad each individually that miner trolls were influencing the decision making processes in Ethereum for the worse. Alex responded that if we pay miners '$1 Billion to $100 Billion annually, it's really not worth an hour of consideration'.

I want to be clear, I not trying to bad mouth Alex or Nick. They just happened to speak out during these times. NO ONE - absolutely no one - on the Ethereum team stopped them. When one side trolls, bans, moderator removes, and makes absurd arguments such as '$1 Billion and $100 Billion are trivially different', and their peers do nothing, then it becomes a collective problem.

For those curious 3 Eth per block was decided when Ethereum was

#$150

I told them that the VALUE of ETH might go UP, in which case this would be a nightmare. Vitalik on call even addresses me incredulously that Eth could rise 5x to over $500 in value... :P

The response that I got from Alex, the main defender wasting billions, was that 'You can not put a price on Ethereum - 3 Ethereum is 3 Ethereum'.

No one correct him. No one.

If you want a GOOD mining reward it must HALF every 3 months, approximately.

For making this discovery and contribution which would have saved ALL Ethereum token holders around $5 Billion on an annual bases - and cause the price to skyrocket - I lost a few thousand dollars in time and actual spending, got temp banned from the Ethereum forums.

#Awesome Sauce.

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marcogiglio commented

I would like to point of out that playing with the reward has the effect of increasing the uncle rate and decreasing the network throughtput, due to the consequences of the EIP649.
I would also like to point out how this proposal may negatively effect the security of the network, as reducing the hashrate may lead to a much higher risk of 51% attack.
Finally, I would make the consideration that reducing inflation is unethical as it advantage currents token holders at the expense of newcomers.

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cslarson commented

Another post I submitted to r/ethereum about this topic was removed by a moderator (despite having 118 comments and 65 upvotes) 14 hours after it was posted. I'll post here the explanation after it is received.

Edit. The post has been re-approved but I as yet don't have an explanation for the removal.

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erkinalp commented

The demand the Ethereum network creates for mining now has a significant affect on the market for GPUs

It already did.

nerdralph commented

At the risk of feeding a troll or kook, I'll give the benefit of the doubt and assume this EIP is just the product of ignorance.
Even if you assume CO2 emissions matter, there is no proof of the carbon intensity of ethereum mining numbers cited in this EIP. Many of the largest crypto mining datacenters run off hydro power.
i.e. http://www.greatnorthdata.com/
If I had to wager, I'd bet that 50% of all ETH mining comes from zero or low carbon sources such as hydro and geothermal.

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cypheron commented

Hashrate growth has come to an end with lost interest in ETH. The groundwork for the used argumentation is no more. Consider the issue resolved.

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cslarson commented

a recent reddit discussion of this EIP in conjunction with a discussion about delaying the difficulty bomb has shown considerable community support.

baerdev commented

clarson, your EIP 858 was/is leading the reddit poll here: https://www.etherchain.org/coinvote/poll/298

But there is a new poll, and they want to disregard your EIP-858 because it doesn't include delaying the difficulty time bomb like it says in the poll. Could you change your EIP to include delaying the difficulty time bomb by 1.5 years like EIP-1234?

tjayrush commented

The complexity is in community consensus, not code.

If this is true (and I think it is), then this issue should be moved to Final Call. That will leave a two week period during which anyone may raise purely technical concerns after which time the issue will move forward in the process, and (since it is core) the Core Devs will decide what to do. (See EIP 1 which describes the process: https://github.com/ethereum/EIPs/blob/master/EIPS/eip-1.md.)

The trouble with coin votes about issuance is that measure nothing other than the obvious human desire to save money.

EIP stands for Ethereum Improvement Proposal. The EIP discussion we should be having is how to gauge exactly what the right block reward should be as opposed to simply picking a number completely out of a hat as this proposal does. Why 1 ETH? Why not 1.25? Why not 2.0? Why not 7.325?

MicahZoltu commented

While I think many of us want EIPs to be purely technical and this to move to approved/final (even if we disagree with it), unfortunately the way EIP 1 is written today, the last call process doesn't apply to Core EIPs.

github-actions commented

There has been no activity on this issue for two months. It will be closed in a week if no further activity occurs. If you would like to move this EIP forward, please respond to any outstanding feedback or add a comment indicating that you have addressed all required feedback and are ready for a review.

erkinalp commented

I have no problem with this.

MicahZoltu commented

I wonder why the stale bot didn't re-activate here 2 months after that last comment... cc @alita-moore

alita-moore commented

Yea that's weird. That's an external bot