Sunday, June 18, 2017

ERC20 token fees on Ethereum network - gas, spam, usability, mass adoption

I've first heard of BTC for the first time in the Wired magazine - article about Silk Road, back then BTC was valued at $13.

I've purchased my first BTC for £73.

I remember bubble of 2013 and emotions related to it.

I remember Ethereum crowdsale but because I wasn't in the first two weeks (2000 ETH per BTC) I skipped that privilege.

I remember DAO, security concerns, hack, hard fork... I actually managed to sell my tokens just before.

This time I've applied for every possible credit card with 0% interest (at some point they started rejecting me) and invested into crypto, but I'm not a great trader and converted some of the gains back into paper money for the repayment fund... Way too early, I poorly assessed state of the market (phases of a bubble) and missed very substantial gains.
(now I understand that it wasn't a bubble, crypto is here to stay for the long haul)

Now I'm back in the game, writing about ICO  - - as well as sharing some lessons about trading - my blog on Steemit - I should actually stick to my own advice and not to trade - invest in a few coins and celebrate in 2020.

I never got a chance to properly learn Solidity, I always assumed there are better programmers than me and my unique skillset is somewhere on the intersection of media, technology and connecting experiences. At some in my life I downloaded Chromium source code, compiled it and realised - I'll let the geniuses do the heavy lifting and I'll stand on the shoulders of the giants.

Right now we have a number of ways of releasing own currency, own token on Ethereum or other platforms. Here are some options:

• Ethereum native: - probably one of the first to be fully operational
• Expanse: TOKENLAB
• +

Next month list probably will be much longer and unless it is your core job as a journalist in the space you'll never keep up.

I had a question about the fees... How to send ERC20 token?

It's non-obvious:

In essence - even though you have some token, you still need to own ETH... The official documentation suggests sending small portion of ETH with each transfer of the token, so that there is always enough to pay for the fees:

Ethereum is likely to evolve from PoW to PoS and there are many proposals in the making, the one from the image above is posted here.

Waves is also requiring fee for transfer:

I've posted to Bancor Slack and it seems like there is some fee involved after all as well:

I genuinely believe it is an interesting problem: 
• No fees allow spamming network.
• Aurorefill as suggested in the docs - expensive - also subject to spam.
• Fees denominated in ETH while holding ERC20 - not practical.

It would be nice if miners knew that certain ERC20 have some value and captures small portion of it, rather than requiring ETH... But then that opens a whole universe of problems related to the exchange rate and which transactions should be included on the blockchain (again spam problem).

Fees in ETH are problematic for mass adoption and usability of local currencies - I'm genuinely keen to learn how 

Some another, silly, potentially ridiculous ideas that came to my mind:
• Centralised server sending just enough ETH to complete transaction?
• Off-chain transaction resolution?
• Proof-of-burn and tokens sent from another location?

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