Ethereum Founder Proposes Solution For Stabilizing Gas Prices

With current Ethereum transaction fees fluctuating daily, Ethereum co-founder Vitalik Buterin proposed a new way of implementing a maximum gas price.

"If you value a transaction getting included right now at $1, you would be willing to bid anything up to $1, but if everyone else is bidding $0.05, then you could keep more money by bidding $0.08 instead."- Vitalik Buterin.

This system is what gives Ethereum its transaction fee volatility.

Ethereum has thousands of dApps running on top of it, all requiring their transactions to be processed.

Depending on the mean transaction fee, users can cause extreme fee volatility.

If a miner has space for 3 transactions and five bids are placed at , the 3rd to most expensive transaction fee will be applied to the highest three bidders.

The Ethereum network has more availability than 3 transactions, making this system effective at eliminating outliers.

A miner can spam higher fee transactions, bringing up the price.

Users would be able to see the current price for Ethereum transactions, and if the fee is too high for a user, the transaction won't occur.

Transaction fees are necessary to incentivize miners and protect against spam attacks.