If ETH is a commodity like Gas what happens when it gets too expensive?

[rmarma01]

Correct me if I am wrong, but isn't the minimum cost of running code on the EVM 5 Ether. Thats currently over $50 at the current Ether price. Since ethereum was meant to provide a platform for decentralized applications, I don't find it at all surprising that ETH's price will behave like a commodity. High ethereum economic growth should drive ETH prices up, likewise when ETH gets to expensive, just like real gas, this discourages economic activity and demand should fall. Right now it would appear that we are at a peak in the ETH price. My main question is will the minimum Gas Price become variable based on the exchange rate, because if it is not, the high cost of deployment could discourage many business from developing on the EVM.

[mtnsaa]

Correct me if I am wrong, but isn't the minimum cost of running code on the EVM 5 Ether. Thats currently over $50 at the current Ether price. Since ethereum was meant to provide a platform for decentralized applications, I don't find it at all surprising that ETH's price will behave like a commodity. High ethereum economic growth should drive ETH prices up, likewise when ETH gets to expensive, just like real gas, this discourages economic activity and demand should fall. Right now it would appear that we are at a peak in the ETH price. My main question is will the minimum Gas Price become variable based on the exchange rate, because if it is not, the high cost of deployment could discourage many business from developing on the EVM.

I think that if Ethereum goal is to be as adopted as much as possible and to reach companies, banks, institutions and so on, having "only" 72 million in circulation and a total of 100m in their lifetime and divisible into Wei (similar to 1 Satoshi) you can infer that it was not intended to cost just 1 or 2 dollars per ETHER (the original price was also not that cheap either, it's not that you could've hoarded 1 million Ethers with $500...).

[rmarma01]

If it wasn't meant to cost just 1 to 2 dollars per ether. Then how are decisions made on what the minimum cost should be to run a program on the EVM?

[mining1]

Well obviously more than the value of cryptos like LTC that are nothing but clones based on pure speculation ?It will all depend on adoption,and by adoption i dont mean just people like us trying to make some profit out of it.

[mtnsaa]

Well obviously more than the value of cryptos like LTC that are nothing but clones based on pure speculation ?It will all depend on adoption,and by adoption i dont mean just people like us trying to make some profit out of it.

Exactly, ETH will have a lot more value if the blockchain and platform starts to get adopted by banks or companies (Microsoft and Reuters showed clear interest on it). Then you have plenty of dapps coming out, if tomorrow a dapp becomes very big or even as huge as Youtube or similar (we could even dream of many current apps just converting to dapps) that all require fuel to run (even if it's very low per contract, like 1 wei or so) you can imagine that the value of 1 ETH would be huge.

The difference is that you need to use ETH, with others altcoins, even BTC, there was intention for you to use it, but we all know nobody really wanted to pay anything with BTC, just speculate with it as it was gold (and that's what it will become eventually, digital gold). ETH is oil and right now we are in the "There Will Be Blood" stage...get your very own oil plant for just 11-12 USD now!

[rmarma01]

Right now I am reading the Ethereum White Paper, and I just read the Ethereum follows a linear supply model. The idea is that since long term supply growth tend to zero, the loss rate and the supply rate will reach an equilibrium, not that there is an actual fixed amount of Ether. So perhaps then Ether's price will follow economic cycle's? Optimism will push the price up, and when the price goes to high, demand will fall causing a bear cycle. Likewise when the price becomes cheap, the facilitation of economic development will push ether back into a Bull cycle. If this theory of mine is true, then the current rally is caused by over optimisim surrounding Microsoft's launch of BlockChain as a service on azure. As emotions calm and speculators hoping to get rich starting taking profits, (hitting the bid), then this should lower the price.

[helloeverybody]

A possible scenario is that ether devs will cashout to bitcoin and crash the price down to the levels its supposed to be at, that way everyone will get burned except for ether and the price will be at a level that would be acceptable to use as a commodity . people will look back at this time and realise how crazy it was paying more than a dollar for 1 ether.

[mtnsaa]

Right now I am reading the Ethereum White Paper, and I just read the Ethereum follows a linear supply model. The idea is that since long term supply growth tend to zero, the loss rate and the supply rate will reach an equilibrium, not that there is an actual fixed amount of Ether. So perhaps then Ether's price will follow economic cycle's? Optimism will push the price up, and when the price goes to high, demand will fall causing a bear cycle. Likewise when the price becomes cheap, the facilitation of economic development will push ether back into a Bull cycle. If this theory of mine is true, then the current rally is caused by over optimisim surrounding Microsoft's launch of BlockChain as a service on azure. As emotions calm and speculators hoping to get rich starting taking profits, (hitting the bid), then this should lower the price.

Well...like, that's what happens with almost any other commodity or investment really. It all depends on how it evolves, I don't consider myself as an investor because my quantity right now is laughable compared to others big ones. However it's clear that if ETH follows a similar road here and there's no major scandals as with Bitcoin, the road is clear for it to valuable at $50 or more in the next 3-6 months.

Ethereum haven't even hit mainstream news or anything like that, not even Bitcoin for that matter but it had its time. The minute the media starts talking about the "next" Bitcoin, the rush will be much higher than now. I agree it's a scary thing to jump in right now (I got in at 90-100s, 3-4 USD) and it was still scary...

[rmarma01]

A possible scenario is that ether devs will cashout to bitcoin and crash the price down to the levels its supposed to be at, that way everyone will get burned except for ether and the price will be at a level that would be acceptable to use as a commodity . people will look back at this time and realise how crazy it was paying more than a dollar for 1 ether.

Then Perhaps its a great time to short.

[mtnsaa]

A possible scenario is that ether devs will cashout to bitcoin and crash the price down to the levels its supposed to be at, that way everyone will get burned except for ether and the price will be at a level that would be acceptable to use as a commodity . people will look back at this time and realise how crazy it was paying more than a dollar for 1 ether.

That's ridiculous, they will never do such sabotage, extremely stupid!

Ethereum is based on Bitcoin in many terms, and you can see how it is divisible on a similar manner, so it's like saying Bitcoin = 10-20 Dollars is expensive. There is not a lot of Ethers, I would understand if there were billions (like other coins, Doge for example...) but it's not the case here.

Computations and contracts will be in Wei (their lowest unit) and 1 ETH is 1000000000000000000 Wei. Go do your maths...

[stoat]

Basically the price of ETH is irrelevant since it is geared down using an internal market system of gas.  Dapps use gas, gas price is set by miner consensus

Its a perfect system. Live with it

[rmarma01]

Current Gas Price is 50 Gwei. This is exteremelly small. If gas price is set by miner consensus, then do that not have incentive to send it lower? Lower gas prices mean mining income for everybody is more dependent on Ether Value if I'm not mistaken? This would mean then by perpetually lowering the gas price, miners are in effect saying a single ether should be worth more?

[rmarma01]

Additionally that would imply miners are hoarding ETH. In the whitepaper the developers said they did not want Ether to become a way for people to concentrate wealth, they wanted it so everyone has a fair change at owning units of the currency. This would seem counter positive to their goals then.

[mtnsaa]

Additionally that would imply miners are hoarding ETH. In the whitepaper the developers said they did not want Ether to become a way for people to concentrate wealth, they wanted it so everyone has a fair change at owning units of the currency. This would seem counter positive to their goals then.

Mining won't be forever since it will change to POS in the next months, please do some research first.

[mtnsaa]

Additionally that would imply miners are hoarding ETH. In the whitepaper the developers said they did not want Ether to become a way for people to concentrate wealth, they wanted it so everyone has a fair change at owning units of the currency. This would seem counter positive to their goals then.

No they implied that ETH is to be used not hoarded and speculated with like BTC, that's why it will be POS.

[rmarma01]

Would you care to explain since you did the research?

[mtnsaa]

Would you care to explain since you did the research?

I can't explain all the technicals aspects because I'm not a developer, but you clearly don't know anything if you are saying that 1 ETH should be 1 USD or something low like that when there are only 72 millions and the ultimate goal is to be adopted by mainstream corporations and institutions.

I remind you that BTC is unheard of in the mainstream world, no one actually uses it and got to $1300. Now you do your math and think how much it could be 1 ETH if it's actually useful and is as if not more divisible than BTC.

[hv_]

Would you care to explain since you did the research?

I can't explain all the technicals aspects because I'm not a developer, but you clearly don't know anything if you are saying that 1 ETH should be 1 USD or something low like that when there are only 72 millions and the ultimate goal is to be adopted by mainstream corporations and institutions.

I remind you that BTC is unheard of in the mainstream world, no one actually uses it and got to $1300. Now you do your math and think how much it could be 1 ETH if it's actually useful and is as if not more divisible than BTC.

Why do you think big corps or instis will adopt it?
I rather see they fork or copy the thing as is, thats why R3 hired Hearn....
Banks cannot just work on open stuff, forget it.

[mtnsaa]

Would you care to explain since you did the research?

I can't explain all the technicals aspects because I'm not a developer, but you clearly don't know anything if you are saying that 1 ETH should be 1 USD or something low like that when there are only 72 millions and the ultimate goal is to be adopted by mainstream corporations and institutions.

I remind you that BTC is unheard of in the mainstream world, no one actually uses it and got to $1300. Now you do your math and think how much it could be 1 ETH if it's actually useful and is as if not more divisible than BTC.

Why do you think big corps or instis will adopt it?
I rather see they fork or copy the thing as is, thats why R3 hired Hearn....
Banks cannot just work on open stuff, forget it.

The problem is that this technology doesn't really work like that, it needs to be decentralized to work, just look at Augur for example. A blockchain adopted by Barclay could be just a fork of BTC, that's it, it's nothing too complicated. They can actually do a fork of Ethereum (although it's not as easy as it sounds) but what is the benefit of that?

If we are pushing AI, decentralized servers, massive data collection, the only way to go is using a standard platform, similar to the internet which it's somehow decentralized except for its server and services. This would improve not only security (which is not minor...) but the possibilities are endless.

[rmarma01]

Would you care to explain since you did the research?

I can't explain all the technicals aspects because I'm not a developer, but you clearly don't know anything if you are saying that 1 ETH should be 1 USD or something low like that when there are only 72 millions and the ultimate goal is to be adopted by mainstream corporations and institutions.

I remind you that BTC is unheard of in the mainstream world, no one actually uses it and got to $1300. Now you do your math and think how much it could be 1 ETH if it's actually useful and is as if not more divisible than BTC.

The supply of ETH is Linear, therefore it will go up if as long as the destruction rate is less than the supply rate. I read the white paper. Where on earth does it say that there will only ever be 72,000,000 ETH. Also im not saying 1 ETH should be something low, what I am saying is that if ETH is a commodity, you can't be constantly pushing up the price! Also if you keep lowering the gas price, you are making more incentive for miners to hoard ETH as the price needs to go up as part of their compensation. Also could you post a link that says ethereum will switch to POS?