Ethereum Miners Protest EIP-1559

  • EIP-1559 is a proposal that would implement a massive change to the fee structure for Ethereum
  • Ethereum is starting to move to a PoS system, and a portion of the remaining PoW miners are against the proposal, claiming it will be damaging to the future of Ethereum
  • Debates about scaling blockchains to reach a global population is healthy for the community, despite the uproar from miners.

EIP’s are Ethereum-Improvement-Proposals, developers submit new features to the blockchain and the community of stakeholders must form a consensus around adopting the new feature. A newer proposal, EIP-1559, is causing waves in the Ethereum Mining community. 

What is EIP-1559?

EIP-1559 aims to introduce a completely new method of paying transaction fees. Currently, the transaction fees are auction-based, with the highest priced fees being confirmed first in the blockchain. This introduces problems during times of high transaction volumes, people sending transactions place higher and higher fees in order to have their transaction confirmed. 

EIP-1559 plans to fix this problem by eliminating the existing auction-based system and replacing it with two new fees – the “base fee” and an “inclusion fee”. The “base fee” would be automatically calculated and set for all transactions, and then the fee will be burned after confirmation. The “inclusion fee” will act similar to the auction system, allowing users to send a small tip to miners for securing the network.

Benefits of EIP-1559

The proposed benefits of EIP-1559 are smaller transaction fees for everyone and a higher economic value of Ethereum. By automatically setting the “base fee” price, and eliminating the auction method, periods of high transaction volume will no longer shoot the price of fees sky high.

The higher economic value of Ethereum comes from the burning of the base fee. Ethereum is an inflationary token, meaning it has no fixed supply. The burning of the base fee limits the total ETH supply by offsetting the issuance of new tokens.

Why Some Miners are Upset

Traditionally, the entire fee would go to miners as a reward for securing the blockchain. EIP-1559 flips the traditional system on its head – instead of rewarding the fees to the miners, the fees are instead burned. Right now, around 30% of miners are opposed to the change. The way they see it, they have invested large sums of time and money on mining Ethereum, and as Ethereum shifts to a Proof-of-Stake system, they are getting left behind. 

The truth is, miners are being left behind in Ethereum. ETH2.0 had its first release in December of 2020, marking the beginning of a transition away from PoW (mining) to PoS (staking). As Proof-of-Stake increases on Ethereum, miners are likely to migrate to different blockchains that support GPU mining.

Why Passionate Debate is Good

The scaling debate has been going on forever in the cryptocurrency world. In fact, when Satoshi Nakamoto first posted the Bitcoin White Paper in a cryptography mailing list, replies were sent doubting the ability of Bitcoin to be able to scale to a mass level. And for the most part, the comments were right. 


Scaling today is being done through technological innovation, building on what other developers have contributed before them. The more ideas are debated, the better the end result will be for the adoption and scaling of crypto.

Views and opinions expressed are solely those of the author and not of The DeChained or any affiliated party. Views or opinions expressed in this article (or any article on the website) are not financial advice. Articles are for informational purposes only. The author and The DeChained may hold positions in assets discussed in this or other articles.
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