A new proposal to reduce the inflation rate on the Ethereum (ETH) network is facing criticism from the mining community, as some miners suggest token investors may be more interested in making money on their holdings than the security of the network. Meanwhile, a bug that infected the Medalla testnet was the “best thing” to happen to it, said an editor.
The center of the controversy this time around is a proposal known as EIP-2878, which proposes a massive 75% reduction in block rewards to miners in an effort to lower the Ethereum network’s inflation rate, and in turn improve the return on investment for ETH holders.
According to the proposal, the reduction would take the inflation of ETH down from currently 2 ETH per block mined, to 0.5 ETH per block. According to critics, however, such a dramatic change could reduce the security of the network, and even open the door to possible 51% attacks.
Discussing the proposal on the Ethereum Magicians forum, one user who identified themselves as a GPU miner said that they’re not in favor of the reduction in block rewards “unless it includes an algo change to remove ASICs from the network,” adding:
“ASICs are highly profitable compared to GPUs. Any reduction in block rewards without an algo change will remove the rest of the GPUs from the network resulting in ASICs totally controlling the network.”
Also critical of the proposal, product manager at PegaSys, Tim Beiko, wrote that the goal of bringing Ethereum’s inflation rate closer to that of bitcoin (BTC) should just be one of many considerations the community need to take.
The main priority should be the security of the network, Beiko said, adding that this includes things like how to reduce the chances of a 51% attack and how to “keep a diverse set of miners” on the network.
The current proposal, made by ConsenSys managing director John Lilic, and the global head of client success at Ledger, Jerome de Tychey, comes after Ethereum’s Constantinople upgrade in early 2019 changed the network’s block reward from 3 to 2 ETH per block.
Medalla testnet bug will not delay ETH 2.0
Meanwhile, the highly anticipated Medalla Testnet for Ethereum 2.0 is also facing its own set of challenges at the moment, after a bug that affected how one server on the network reported time and date took most of the network’s validators offline on August 14.
The mishap led some of Ethereum’s harshest critics, including some members of the Bitcoin SV (BSV) community, to claim that the event would set the launch of Ethereum 2.0 back by a significant period of time.
But according to Raul Jordan of Ethereum development firm Prysmatic Labs, the bug was “the best thing to happen to a testnet,” as it offers an opportunity to fix things before the mainnet launches.
Jordan wrote in a blog post on the incident published this week:
“We believe this incident does not inherently affect the launch date. The Prysmatic Labs team recommends ETH2 launch schedule to continue with no delay. The incident from this weekend was a good stress test for many clients and actually checks off a few requirements on the launch checklist. While the launch date has not been set, we believe the expected launch target of 2 to 3 months from Medalla genesis is still an ideal timeline,” though the checklist is getting longer.
Launched on August 4, Medalla is the final multi-client testnet before Phase 0 (the Beacon Chain) of ETH 2.0. As reported last week, the testnet had seen a 30% rise in active validators and staked ETH during its first week, and was then largely described as a success by Ethereum developers.
Also as reported, Afri Schoedon, release manager at blockchain infrastructure company Parity Technologies, estimated that November could be the possible Phase 0 launch time, provided that no critical issues are found, though early 2021 was also mentioned elsewhere online.
At 10:50 UTC, ETH was unchanged in the past 24 hours, trading at a price of USD 408 per coin. However, the price was down 4% for the week, with on-chain analytics firm Santiment yesterday warning that selling pressure could persist for the asset.