Ethereum with 1 MB blocks is Vitalik Buterin’s new proposal

Ethereum with 1 MB blocks is Vitalik Buterin's new proposal

Ethereum co-creator Vitalik Buterin has suggested a new Ethereum Enhancement Proposal (EIP) that seeks to increase the block size to 1 megabyte (MB). This, in order to find a solution, in the short or medium term, for the high rates that are currently paid in this network specialized in smart contracts.

EIP-4488, which is currently under discussion, was published last November 23rd on GitHub. The motivation for increasing the block size is focused on making more use of rollups or second layer solutions. According to Buterin could reduce current commissions up to eight times. All this before the arrival of Ethereum 2.0.

Currently, the blocks in Ethereum are only limited by the amount of gas that each transaction adds up to. Gas, within this network, means the computational cost required of a miner to validate an operation. Currently the maximum limit per block is 12,500,000 gas.

The price of gas is defined by the consensus of miners, who decide whether to increase or reduce it according to demand. A particular transaction on Ethereum – like sending ether (ETH) from one wallet to another – typically takes 21,000 worth of gas.

With the current cost, according to data from Eth Gas Station, of USD 0.17 per 100 gas units, the commissions are around USD 40. It should be noted that, although the commissions are expressed in gas, the final payment is in ETH.

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The new EIP, if approved, would change the protocol rules, and would establish block limits according to the amount of data with a maximum of 1 megabyte.

Historically, the maximum size reached in a block of Ethereum has been 0.08 MB. It is a figure almost 10 times smaller than the size proposed by Vitalik Buterin.

Ethereum with 1 MB blocks is Vitalik Buterin's new proposal
Average Ethereum block size in MB since 2015. Source: Bockchair.

The Ethereum blocks, with their current weight and with mining times of 12 seconds between each of them, process about 15.1 transactions per second (TPS), according to data from Blockchair. An increase in the size of the blocks could lead to an increase in the TPS.

Currently there are Rollup developments that handle many more TPS than the Ethereum mainnet processes. One of these cases is the one reported by CriptoNoticias, ZkSync 2.0, which promises to process more than 20 thousand TPS once they are activated.

In this case, increasing the size of the blocks in Ethereum would allow more room for this type of second layer solutions, since there is more space for processing the information of the rollups.

However, the increase would have its cost. With a block mined every 12 seconds and a weight of 1 MB, it would mean that the blockchain would grow, theoretically, 3 terabytes per year, or according to Vitalik, in more favorable scenarios, 1 terabyte per year. This could present a challenge for new nodes connecting to the network and needing to audit such amounts of data.

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For now, the EIP is under discussion and has yet to be approved. However, as demonstrated in the thread discussion of the proposal, Several developers have given their approval to this improvement for Ethereum.

If approved, it remains to be seen how this EIP would reach Ethereum, as it can be through a hard fork or a soft fork.

High fees: Ethereum’s headache

Ethereum has been suffering from quite complicated network congestion for a long time. With the rise of DeFi, NFT and P2E games, the network suffers from increases in its commissions, which means that users have to pay, at times, up to USD 65 or more in fees, depending on data from BitInfoCharts.

Second layer solutions seem to be the answer. Ethereum rollups and sidechains currently host a large number of decentralized applications (dApps) in search of better network rates. For example, current fees on Ethereum are, on average, around $ 40, while rollups like Optimism are in the $ 3.62 range.

The stakes are on the arrival of Ethereum 2.0, and the consensus protocol change from PoW to PoS. However, it is vital that a solution is found in the short or medium term to the issue of commissions.

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