Ethereum Q&A: Skyrocketing Network Fees, what can we do?

high gas prices seem to be the norm now on ethereum does this kill innovation for non-d5 projects and how can this be fixed huh yes um it it's a problem um but it's not an unsolvable problem and it can be fixed probably in exactly the same two ways um maybe three ways uh that it could be fixed in bitcoin so how do we fix uh high fees in bitcoin three ways increase the underlying block size which creates problems with decentralization elsewhere implement various forms of side chains or implement a layer 2 technology which is effectively a side chain per payment channel kind of idea where you have a framework for creating lots of side chains which are payment channels and ethereum can do all three of these but again ethereum already has a much much bigger blockchain because it's recording a lot more information in order to keep state of smart contracts and record the data that these smart contracts rely on so it already has a bigger problem than bitcoin in terms of the growth the accelerated growth of the underlying blockchain so how is this fixed well the first fix is with the introduction of ethereum 2.0 we have a concept called sharding and what sharding does is essentially it partitions the blockchain into a number of let's call them side chains or shards that contain a subset of the data and then synchronize with each other then another way is to use layer two technologies and layer two technologies um such as radon and opportunistic roll-up and zk roll-up are already deployed on ethereum and will continue to grow to address this underlying problem now let's take a step back and look at this from a philosophical and strategic perspective um i don't want to say told you so but i am going to say told you so um we've been having this conversation for a long time in bitcoin back in 2014 2015 already this conversation about scaling and low fees had already started and at that time um many people in the ethereum space made two claims that proved to not age well one of them was that this entire debate caused a lot of drama in bitcoin um and demonstrated how toxic the bitcoin culture was um and the other claim was that ethereum could do it better cheaper faster and fees and block size was not going to be a problem for ethereum both of those claims ended up being untrue first of all as soon as we had very serious issues to debate in the ethereum space some toxic attitude came out there too and a lot of the early kumbaya feeling that existed in bitcoin 2 or also in 2012 2013 everybody was kumbaya in bitcoin and quickly disappeared in ethereum also once you had significant controversy to debate so now that we see that ethereum also has to deal with these fundamental design decisions these trilemma issues security decentralization or cost and balancing these three is difficult so um ethereum is trying some different approaches to to solve these problems but the problems still exist and here's the underlying lesson for all of the other chains that say we can be cheap we can be secure and we can be decentralized all at once because of our latest widget orama 3000 which solves all of these problems through the application of matic magic quantum um tangle chains whatever the bottom line is that these are not easy problems to solve and when you solve them but you don't solve them at significant scale well you didn't solve them never confuse calm seas for good sailors you're a good sailor when you're a good sailor in rough seas you're not a good sailor when you're sitting in the port laughing at the people in the storm and going look at you people you're all very wet the bottom line is that both the difficult choices and the drama that happens as a result of tackling difficult choices are going to come to any chain that is lucky enough to become successful enough to matter and all of those scaling issues will arrive so the lesson from ethereum is not really about ethereum because we'd already learned that with bitcoin and ethereum many people in ethereum understood that this problem was coming the lesson here is for many of the other systems that pretend that these problems are not there or won't happen to them and they will if you enjoyed this video please subscribe like and share all my work is shared for free so if you want to support it join me on patreon you

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