So anyway, what are you saying? I'M, the man whitey and you guys are the victims of a tyrannical racist, oppressive society, that's right man that sucks Applause, if only you were still around to finish that mission, but i'm here it's time for chico crypto. Well, like the live stream over the weekend i'm. Not going to dive into my feelings regarding what is going on with america and its fall from grace, this is a crypto channel, so we're going to talk about crypto and focus on the base layer of ethereum. Zergatik? Because ethereum took off over the weekend going from below 200 last week to as of yesterday at about 235 and compared with bitcoin, the surge has been much stronger. Btc in the past. Seven days is only up 3.7, while ethereum is up 14, so my ethereum short it's getting wrecked, but like a good leveraged trader. If there is one i did, what i could afford to lose did low legal leverage, which means i am not liquidated and still have 50 of my wiggle room left, but this is living proof of why i do not leverage trade, the markets they aren't making sense. Fundamentally, so do you think that would make sense technically, but maybe i should have shorted btc, which i would have done if i could have done in a decentralized manner. Hurry up run btc because the fundamentals of ethereum were and continue to look oh so sweet while btc keeps falling behind so let's get into it.
Smart contract, king ethereum it's, no secret that the good news is abound for ethereum. As we turn towards the heat of the summer. Digital dollar news is abound, bitcoin on ethereum news is abound, but there's, something most people don't realize, will have bigger effects than either of those and it's a core change to the ethereum protocol, ethereum 2.0 and staking tyler. We know about that. No friends: i'm talking about ethereum improvement proposal eip1559, which does have implications to ethereum as it's on vitalik's overall roadmap as a key component to the full launch of 2.0 it's part of the bigger picture. So what is it? Well, if you use ethereum, you know about the network and gas fees for sending transactions. Each smart contract has a fee associated with calling it and those fees are paid to the miners of the network. Currently, ethereum employs a first price auction gas fee model, and here is where the problems have been happening when the fees are actually having to be paid. The term that best describes gas is fuel for the ethereum network, but fuel it's, not a currency on its own. In the real world or any type of fuel it needs to be bought and denominated and usually fiat. The same goes for gas and ethereum for it to be paid. It needs to have its value expressed in ether, the underlying cryptocurrency of the ethereum network, like oil. There is no fixed price to convert gas to ether, it's left to buyers and sellers miners to come up with a price suitable to both sides.
This pricing is achieved through that first price virtual auction. The system works by having every sender submit a bid known as a gas limit, for how much they're willing to pay miners then pick up the desirable transactions and include them in the next block. You would think this system would allow senders to prioritize their transactions by paying a higher fee. In reality, this mechanism has serious flaws. What usually happens is that the miners select the transactions with the highest bids, causing senators to set even higher bids on other transactions. They make there is also the problem of transparency. There is no way for someone to know what bids came with other pending transactions, which also results in overpaying, and data has proved people are overpaying eric connor dove into this. In a medium post fixing the ethereum fee market and from a random string of blocks, he analyzed he found that senders were on average, grossly overpaying, sometimes over 5x, of what they should have who likes overpaying, who likes a system where the miners can manipulate the network. To force the users to pay higher fees, increasing their profitability, and this is what eip1559 was made to do level the fee market for both the network, validators and proof of stake or miners in proof of work and the users of the network. So how does it do it? Well, you know your boy chico has been based for a while, but ethereum is about to get a taste of that ace of base.
I saw the side: how is the ethereum getting based through the base fee structure of this eip? What is the base fee? Well, instead of the virtual auction for miners, gas prices will begin with a base fee amount, get it base based, which is adjusted up and down by the protocol. Based on how congested the network is as of right now, the gas limit of ethereum is 10 million gas, but to accommodate this new system max gas for the network capacity would be increased to 16 million gas. Although the 10 million gas limit mark is still used in the base fee structure, when the network exceeds the target, 10 million gas usage, the base fee increments up slightly and when the capacity is below the target, it decrements down slightly because these increments or decrements are Constrained and known the maximum difference in base fee from blocked block is predictable. This then allows wallets to auto set the gas fees for users in a highly reliable fashion, which they expect most daily users of wallets, like my ether or metamask, to not have to mess with gas fees again, even in times of high network congestion, simplicity, it's great. But what about adding scarcity and value right back to ethereum holders? Well, that base fee is burned, baby burned, yeah that ether that gets used it gets destroyed and thrown into the abyss forever forever forever. Forever miners or network validators and proof of stake. Don'T get this fee, which is important because it prevents miners from manipulating the base fee in order to extract more fees from the users as they grew, which they do on some level today.
So it's great. The benefits for users as complexity is taken out. Fees are brought back into equilibrium and the ethereum supply gets reduced as tokens are burned, but how will this benefit the miners and eventually proof of stake? Validators down the road i mean, if you look at bitcoin and sent to having those miners, are relying more and more on the fees. Over 30 day averages, bitcoin transaction fees have reached over 1 million per day and minor revenue from mining plummeting to 12 million per day, based on 30 day averages or fees making up 8.3 of the miners revenue. So you got to have happy network validators, aka miners and ethereum's proof of work. How are they going to be kept happy without those fees? Well, we got to start tipping them. Miners get tipped by the wallet and the app users for including their transactions in a block like mentioned post implementation of this eip, the base fee will be estimated by their wallet, but in the background they will also include a small tip like .5 gui, which is Nothing all that is done by the wallet or d app automatically, but if you don't want to do that, you have the option to do a manual transaction like now and include a large tip to get it included earlier, and the miners get to keep that entire Tip so this should benefit everyone as a whole, like mentioned users, but also miners, and eventually the staking validators.
They are still rewarded by the network and fees, but now it's a tip from wallets or advanced users, even though the miners or validator fees will be reduced. The economic value of burn benefits them too, as the economic token they are working for is having reduced supply pressure, which increases the value of that work. So when, when is this coming well late, last week the ethereum foundation had eip1559 implementers called number two, and things are looking saucy. First, it was discussed that the design of the eip should include escalator fees, specifically a floating escalator design, and then dan finley lead developer. For metamask gave a design update for what this eip with escalator fees could look like for users, simplicity, but also the option for advanced transactions for those who need it. Well, viewers like west canaan, texas, coach, bud, kilmer the fundamental basics is what we should stick to. You listen hard, stick to the basics, stick to the basics! Stick to the basics. Why did i stray away and try the freaking hooped you oopsie ooh, give me a break hoofty fucking hoop. Give me a break.