The Problem With Ethereum Part 2

Ethereum’s Actual Innovation— Making Deflation As Bad As Inflation

Average Ethereum Transaction Fee in USD June — November 23, 2021

Bitinfocharts.com

Who Was Hurt and Who Benefited?

  • Miners — the working class — now earn less for their work as fees are burned instead of rewarded to them. (Read part 1 to see how unfairly this class has been treated.)
  • Those who now stake get new coin rewards, earning an estimated reward of over 5% annualized on their staked coins (according to stakingrewards.com)
  • If you’re in the wealthy class and can stake on your own with the minimum 32 Eth, or $130,000 or more worth of it, you won’t notice the $50–$100 fee to stake your coins. And you’ll earn over $6,500 worth of new coins in a year. You’ll earn it without doing any work at all, just like the people close to the money printer in the corrupt fiat system.
  • However, if you’re in the not wealthy “Etherian class” — say you’ve only got a few hundred dollars worth of coins, like $500 — it will cost you $50-$100 to transfer your coins in your staking transaction to the pool, plus any additional fees they charge. With your $400 of remaining value you will earn a meager $20 of new coins in the year. It will take you 5 years just to earn back your transaction fee! So it doesn’t make sense for normal Etherian class people to stake, even with staking pools.
  • Just like everything we’ve observed before on Ethereum, the rich benefit at the expense of the poor.
  • While deflation of the money supply is occurring, and this has led to a short term spike in the value of Eth, it has come at the expense of the users of the system, who now must pay sky-high fees — it is in fact those burned, sky-high fees, paid by users of the system that are what account for all of the deflation and pay for the new coins issued to the wealthy class.

Is It Immoral to Own A Large Eth Stake?

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