Advertise Jobs at BTCManager BITCOIN PRICE: 2,715.00 HIGH: 2,744.20 LOW: 2,662.23 BTC = USD #TRENDING STORIES Next Event Money 20/20 Europe • June 26-28, 2017 European-focused event on Fin-tech, providing an overlook of the disruptive ways in which consumers and businesses manage, spend and borrow… → BTCMANAGER TWITTER: TOTAL TWEETS: 3850 total FOLLOWERS: 16159 official hashtag:#BTCManager BTCMANAGER Has Gas for Ethereum Applications Become Too Expensive?In May of 2016, exactly one year ago, Ethereum’s token ether was valued at around $10.That meant freelancers on the Ethereum-based job market platform Ethlance had to pay a little more than $1 or 10 percent of the ETH price, to set up smart contracts for their profiles.However, ETH is valued around $90 at the time of writing, a price that is nine times higher than ETH’s value in May 2016.The rapid surge in the market of Ethereum made it increasingly expensive for applications and their users to set up smart contracts.

At the beginning of May, one of the developers of Ethlance better known as Madvas on various online communities revealed that freelancers on Ethlance were required to pay around $5 to $8 on average; one freelancer who wanted to create a profile page was charged $7.79 in ETH or gas.As shown below, Ethlance is a platform wherein freelancers can upload their profiles in smart contracts and broadcast them to the Ethereum blockchain for employees to see.Within the smart contract, freelancers can include their skills, overview, biography, specialty, name, and so on.According to Madvas, who expressed his concerns over the increasing gas costs for decentralized applications and users, one of the users had to pay $7.79 in ETH or gas to submit and broadcast his smart contract.Madvas wrote: “Gas fees would cost him in worst case $7.79.On average, around 50-60 percent of that.In any case, it is way too much.Back when ETH was about $10, max fee for creating freelancer profile was little more than $1.

Creating freelancer profile is most gas costly transaction on Ethlance, because it has many inputs, but max fee of $7.79 is certainly not mass-adoption-ready price.” The issue noted by Madvas was that the Ethereum network and its gas price do not adjust to the ETH/USD rate, which has been increasing at a rapid rate for over a year.cambiare litecoinAs a result, gas has become costly for applications and users initiating smart contracts.bitcoin cliEtherplay, a transparent gaming platform where players can win ETH, has also been affected by rising gas costs.system administrator bitcoin miningThe Etherplay team plans to overcome this problem by modifying their system and investigating a potential change in the way Ethereum deals with gas and miner rewards.bitcoin difficulty in 6 months

In the thread, Ethereum co-founder and lead developer Vitalik Buterin presented a counter argument to madvas’ concern regarding gas costs.dice bitcoin gamblingMadvas previously noted that to create a profile on Ethlance, it costs around 3.7 million gas.bitcoin scrypt infoButerin explained that if a smart contract initiation costs users 3.7 million gas, the application itself is coded suboptimally.He also emphasized that the Ethereum development team is at fault for not providing sufficient tools to carry out large data sets and smart contracts.Buterin said: “If it costs you 3.7m gas to make a profile, that means that the dapp is definitely coded in a way that's highly suboptimal.In the long term, having every single user impose 4m gas worth of burden on the entire network is not sustainable, at least until and unless we implement some form of super-quadratic sharding.

That said, I do understand that the tools to do the above are not yet very good and so it's not that easy for regular developers to make these kinds of optimizations, and this is our fault.We're working on it.” Throughout 2017, as BTCManager reported in the past, the Ethereum foundation and development team plan to roll out some important features and updates.Buterin and the rest of the development team hope to resolve these issues with gas costs and large smart contracts in the near future.We are now over three months into Homestead, and it has been an intense ride as we’ve seen increased mainstream media attention, massive ETH price increases, and witnessed the birth of “The DAO” as the largest crowdfunded project ever.All these are reasons to celebrate and be grateful that we are lucky enough to participate in something so epic.Many people, myself included, were not expecting things to move quite so quickly.The mind blowing part is that things don’t appear to be slowing down at all - on the contrary, the rhythm seems to be accelerating.

With all these exciting things happening in such a short while, it’s easy to get lost in this rush and forget why we started doing this thing in the first place.So, let’s take a few moments to look back and think about why we started this, where we are, and where we want to go as the only way to shape our future is by taking control of the present.“Success is not final, failure is not fatal: it is the courage to continue that counts.” ― Winston S. Churchill Ethereum made the concepts of decentralized applications and organizations possible by introducing ETH as a “cryptofuel”, which can be used to pay the “gas” used for computation on its turing-complete blockchain.This is how Ethereum was described as a “platform for decentralized applications”, a “blockchain apps platform” or, more recently, a “shared world computer”.These descriptions differentiated it from the sea of “altcoins” that was floating around the blockchain space and made it easier for people to understand that Ethereum is “more than an altcoin”, in the sense you can build cool things both with and on it.

This paradigm shift sparked the imagination of developers worldwide and even attracted the attention of established institutions and corporations from multi-national banks to international corporations.However, in a paradoxical way, the recent wave of positive news and events that brought along the ETH price increase also boosted the costs of running these groundbreaking decentralized applications and organizations.Before continuing, for those that haven’t yet wrapped their heads around the concept of “Ethereum gas”, I highly recommend watching this presentation, given by Joseph Chow: The side effect of ETH price increase is negligible when talking about basic things such as sending ETH from one account to another since the equivalent in USD would be around ~$0.007, at the current prices, for ~21K gas to cover the transaction.The problem becomes more visible when we look at how this affects decentralized applications and organizations.If we take “the DAO” as an example, something as simple as transferring DAO tokens from one address to another or casting a vote can reach fees between $0.05 - $0.1 to cover the computation gas.

We learned of this problem as we were experimenting with an identity system for AKASHA where each profile had its own smart contract.We touched upon this ID system a while ago, but briefly, this approach comes with increased extensibility at the cost of complexity.Our tests with this method revealed fees as high as ~$0.16 for ~500K gas used for deploying your own smart contract profile.We were expecting higher costs with this approach and there are probably places where we can optimize the gas usage, but this is beside the point of this article.Instead, let’s focus on the bigger picture as a community.We will cover the nitty, gritty, smart contract details in another post.Here is an overview of the Ethereum market cap/Ether price evolution, courtesy of coincap: Next is an overview the Ethereum gas price evolution during the past few months: You can clearly observe in the next chart how the gas price adjustment introduced with the homestead release impacted the gas price across the network: The graph above also shows how the gas price has not changed, even if the price per ETH more than doubled.

“Efforts and courage are not enough without purpose and direction.” ― John F. Kennedy Homestead brought with it the first gas price adjustment and to a certain extent, the issue we’re facing now related to the ETH/Gas price increase was to be expected, as pointed out by Vitalik in the last discussion on this topic.Today, the ETH price is more than double compared to when the first gas price adjustment was made, and we think another gas price adjustment is needed.These high gas prices are harmful to the Ethereum ecosystem in the long run, as they slow adoption down by making it too expensive to build and run things on it.Oversimplified, I think things look like this: High Gas Price -> Less Dapps -> Less Adoption -> Smaller Ecosystem -> Smaller Market Cap -> Everyone Loses (including the miners) Low Gas Price -> More Dapps -> More Adoption -> Bigger Ecosystem -> Bigger Market Cap -> Everyone Wins (including the miners) Maybe we are more aware of this problem as we are on the frontline of dapp development with AKASHA.

However, I’m sure everyone would benefit from another gas price adjustment because this would lower the entry barriers while increasing the chance of adoption at large scale – and, in the end, adoption is critical for technologies like Ethereum.This is an open call for a new discussion on how we can deal with the problem of gas prices now and how we can tackle this issue to keep the Ethereum World Computer accessible to as many developers and users as possible.Ethereum was created to serve humanity, and it cannot fulfill its world-changing destiny if it becomes too expensive to use.All this being said, one of the most amazing things Ethereum has, besides the fantastic technology, is this great community united by a pure passion for ideating, co-creating and iterating.This is why, I’m sure we can fix this one as well, together.Join the community discussion here.Mihai Alisie is the Founder and CEO of AKASHA.He has been actively involved in the blockchain technology space, since 2011 when he created with Vitalik Buterin the world’s first Bitcoin centric publication - Bitcoin Magazine.