[Take with Vitalik] Does ETH need transaction fee?

[Suyeah]

I always think it's unreasonable to have high transaction fee per transactions, and is researching about EOS's model: Account Registration fee + 0 transaction fee. I recently met Vitalik in a conference at HK, and tried to ask him about his POV.


Me: When we want to make large number of transactions, it is almost free of charge. For example, if I make transaction with 1000 RMB on Alipay, nothing will be charged. But on Ethereum network, we need to pay gas for each transaction and contract execution

Vitalik Buterin: Yes, you are right. And this is why we think scalability is quite important. No matter we take shading or off-chain technology to improve the scalability, it will reduce the gas to some point when the transaction fee is low enough.

Me: However, there will be some cost?

Vitalik Buterin：If the transaction fee is as low as 0.00043 USD, does anybody care?

Me：Regarding to this question, EOS takes the mode of “deposit membership fee”, how do you think about it?

Vitalik Buterin： I have to criticize EOS about this! It will actually cause large number of nasty problems if you only need to deposit money at the very beginning, but don’t pay for any transaction later.

Me：What kind of problem? Can you make an example?

Vitalik Buterin：First of all, you actually pay even with the mode of “deposit membership fee”. Before i saw the statistics, if you compare Ethereum with EOS, the result is that you need to pay 15,000 USD on Ethereum, but 100,000 USD membership fee on EOS, which is much higher.

Secondly, users don’t know how many transactions they will make in the future. For example, it is impossible to know you will make 3 or 30 transactions per month. On Ethereum network, users pay gas when they make transaction, which is under their control. But for EOS, people need to pay “membership fee”, and also can’t pay with the frequency as they like.Don’t you think this is kind of taxation?

Thirdly, because blockchain resources are limited, if we choose to bid for that, undoubtedly it will be the best distribution method.




Frankly I like EOS's model more, what is your point of views towards ETH transaction fee?

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[joniboini]

I like ETH more than EOS (I never use EOS too).

There is a difference between "too high" and "affordable transaction fee". EOS model might be good if you use the network many times, but for people who don't use it regularly, paying membership fee is weird to me. On top of that, they're in the process of scaling the network so that fees can go as low as possible.

EOS has "lower transaction fees" but they force you to pay for membership, while ETH fees are dynamics based on the network. EOS can do that because their validator is rich enough imo (Huobi, etc), while ETH (at this moment) is still using PoW.

[rodalutor]

Another point with a subscription based payment method is that people can spam the network as much as they want at no extra cost. I have to agree with Vitalik that this is not the ideal method and again that if the tx fee is far less than 1 cent, does anyone really care?

[hamopipa]

Both networks and their transaction fees system have both good and bad sides, and this is mostly based on what are you using these networks for and how frequently. If you know in advance how many transactions per month you will have, EOS is way to go. On the other side, ETH is better for people who are using crypto less frequently or not consistently. I never used EOS, because I make transactions few times every other month, so ETH is much suitable for me. I also like that I can set the transaction fee (gas price). Even though I am using ETH, as I said at the beginning, EOS has its place with their fees system and you make some good points.

[beerlover]

EOS model is great for starting out but considering crypto is aiming for a brighter future it is not sustainable in the long term.
If you get into EOS right now and stay only for a year and get out the system EOS has is PERFECT for you, however if you are investing for the future and even for your children than ETH is by far the better option.

EOS is working on that system like its mlm where you constantly need money poured into it so they could actually keep going otherwise there will never be any fee attached to anything which would make scale issues higher. ETH on the other hand could drop the transaction fee as low as 0.00043 cents per transaction and that is just ridiculous, unless you do 10.000 transactions a day than this price would be so low you won't even care about it.

[Suyeah]

My point is that : The core problem is not if the transaction cost is big or small, it's about bringing blockchain into mainstream.

For example, you gave your grandma a game account to play a game on Ethereum, and every actions need to use smart contract.

But she doesn't have ETH because she know nothing about blockchain, so she can never play the game unless she learns how to buy ETH on exchange, how to use wallet etc.


But with an account which dosen't require transaction, she can use DAPP without any knowledge about blockchain.

[Suyeah]

and when we ask when next bull, I think the key is to bring in more users to blockchain.

[cellard]

My point is that : The core problem is not if the transaction cost is big or small, it's about bringing blockchain into mainstream.

For example, you gave your grandma a game account to play a game on Ethereum, and every actions need to use smart contract.

But she doesn't have ETH because she know nothing about blockchain, so she can never play the game unless she learns how to buy ETH on exchange, how to use wallet etc.


But with an account which dosen't require transaction, she can use DAPP without any knowledge about blockchain.

It's all about an user friendly front end. Bank transfers have fees, pretty high compared to crypto. Bitcoin is still cheap compared to most bank transfers and faster. Yet we see old people using bank transfers all the time because they are used to their front end.

As far as grandmas using Bitcoin, I don't think it will ever happen, until current generation of millennial are old since they will grow up with Bitcoin.

LN will have very user friendly front ends which anyone can use with a phone. The average Joe doesn't need to know what even an on-chain or off-chain transaction is or even the fee since it will be tiny. All that matters is it will be easy to use and transactions are settled in the Bitcoin blockchain which is safer than anything else out there.

[rodalutor]

My point is that : The core problem is not if the transaction cost is big or small, it's about bringing blockchain into mainstream.

For example, you gave your grandma a game account to play a game on Ethereum, and every actions need to use smart contract.

But she doesn't have ETH because she know nothing about blockchain, so she can never play the game unless she learns how to buy ETH on exchange, how to use wallet etc.


But with an account which dosen't require transaction, she can use DAPP without any knowledge about blockchain.

It's all about an user friendly front end. Bank transfers have fees, pretty high compared to crypto. Bitcoin is still cheap compared to most bank transfers and faster. Yet we see old people using bank transfers all the time because they are used to their front end.

As far as grandmas using Bitcoin, I don't think it will ever happen, until current generation of millennial are old since they will grow up with Bitcoin.

LN will have very user friendly front ends which anyone can use with a phone. The average Joe doesn't need to know what even an on-chain or off-chain transaction is or even the fee since it will be tiny. All that matters is it will be easy to use and transactions are settled in the Bitcoin blockchain which is safer than anything else out there.

Precisely, both still have transaction costs, it's just one is upfront and afterwards not visible whereas the other is visible at all times. If you just loaded that grandma's account with ether equivalent to the EOS subscription then which one would be better?

[vixcious]

It depends on the level of investment by different investors. A long-term investor will not use the EOS platform because he has few transactions and the membership fee is quite high compared to his basic transaction fee.

[Suyeah]

I think ETH and EOS will both exist and there are two different groups of people using it. And of course ETH will have more value of storage and EOS will be used for more applications and high-frequency transactions.

[Naida_BR]

The biggest problem that ethereum is facing right now is incredibly high cost of fees. I don't think membership fee is the solution to that especially if users don't want to make a lot of transactions in the network. For me, the best way to tackle this issue is something like TRON has done with bandwidth. However I'm not sure if this has any application to the Ethereum network.

[Matthewmorris4]

To be honest, I also agree with the vital statements regarding the membership deposit from EOS, we cannot know clearly the number of transactions that we will do in a certain period (maybe worthed if you are a developer) but as personal, this becomes a problem like every tax month, Even though, each coins have plus and minus, no one can make the perfect one, its always have fees.

[davis196]

The EOS business model looks ridiculous to me.
They have to replace that one time deposit fee with a smaller monthly "account maintenance" fee.Banks usually charge such small fee to all bank accounts.This will make their model more felxible.
I think that this one-time deposit fees discourages many people into buying EOS.

[Renaldi blackspadeteam]

EOS is suitable for those who actively conduct transactions, but I still like ETH because I rarely do transactions, on the basis of EOS and ETH having advantages and disadvantages,