What should be the cost of Blockchain? The Compelling Case for Higher Fees

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How Much Should a Blockchain Cost? The Convincing Case for Higher Fees

As per a group of researchers, cryptocurrency clients are a flock of free-loaders.

Well, perhaps they wouldn’t go that far. However, they contend clients aren’t paying for specific information they should be paying for, and thus, are putting the development of blockchain network in danger.

At least that’s the discovery put forth by a newspaper that layouts a system for how higher fees have been charged in the view of the number of data clients need to store on a blockchain and the amount of time their information needs to be saved.

It’s a questionable finding since rising transaction fees have set numerous cryptocurrency groups into infighting as different stakeholders talk about the answers for scaling blockchains and pushing the costs down.

Still, IQHK research fellow Alexander Chepurnoy trust some part of the issue is that miners just don’t have excellent methods for pricing their services accordingly.

Chepurnoy said:

“Miners are judging fees on bitcoin for bandwidth consumption, so for transaction size, and that’s it. The idea of our research is we have few a different things we need to charge for.”

In fact, because of the way transaction fees are determined in many of the cryptocurrencies today, Chepurnoy said, clients are encourage to overuse some data, making blockchain full node software develop and turn out to be more cumbersome to spin up and run – which he contends is a terrible thing, since total nodes are the most secure way to interact with the bitcoin network.

Blockchain tends to grow bigger and bigger over the years as individuals embrace these systems and utilizing them more for transacting. Bitcoin’s state, for instance, has increased by around five times since 2014, while Ethereum’s is growing significantly faster.

In any case, by slapping a charge on this data storage, Chepurnoy expects that clients will be more cognizant of only saving what data is a must, in turn, shrinking the rate at which the state develops.

Why More?

For a few, paying additional fees would appear to make cryptocurrencies less appealing (as they’ve been touted as less expensive ways of transacting) regardless, Chepurnoy’s objective is exactly opposite: to make cryptocurrencies easier to use.

At least, more straightforward to use in their most secure form – by running a full node.

And this isn’t only an issue for Bitcoin, Ethereum’s state is around three times as big.

Chepurnoy sees these charges as an “economic solution” to “unreasonable” information development, slashing transaction data would make it simple to run a full node.

He Continued:

“If cryptocurrencies are for people, not just for banks, then it should be possible to run full nodes on normal laptops today.” 

Keeping Crypto Alive

Thinking of a sensible fee scheme is simpler said than done. Chepurnoy accepts it’s “trickier” to put practice.

Since one method of fixing this issue is to make clients pay to what extent their state to survive on the blockchain. But this would require clients be able to foresee precisely to what extent their country will exist in advance – which they many times can’t do.

Chepurnoy accepted, “Usually you don’t want to think about how long your money will be alive.”

As such, the researchers propose an algorithm, what they call “scheduled payments,” which enables clients to add more fees to a transaction over time, in this way, broadening the life of the transaction’s state.

Still, Chepurnoy trust the proposition may get more consideration from Ethereum developers, who have considered a comparable mechanism called “state storage rent,” and are dealing with a node that is developing at an exponential rate.

He said:

“We need to avoid this infinite growth.”

Garry Singh

Garry is an experienced entrepreneur, and co-founder of a UK based technology company Quickdesk Solution Ltd., with a demonstrated history of working in the information technology and customer services industry. Skilled in technical writing, he is a strong business development professional with a Bachelor's Degree focused in Information Technology and Masters in Business Administration.