Ethereum [ETH], which is ranked at number 2 spot in the rankings is gearing up to charge ‘rent fees’ for the people who use their network to store data. This decision was taken by the creator of Ethereum, Vitalik Buterin who gave a detailed description of the ways and principles of computing such rent fees.
Ethereum has dropped from an intraday high of $494.61 almost crossing the $500 mark to $455 swing low. This trend seemed to have set in about 12 hours ago when it started declining.
As per Buterin’s plans, he looks forward to coming up with an estimate of the annual rewards given out by the Casper and Sharding mechanisms. Casper serves as an alternative to Satoshi Nakamoto’s consensus based on proof-of-work and is based on a security deposit. Sharded blockchain architectures seek to measure the capacity of the platform. This estimate amounts up to 10 million ETH staking at 5% interest, which is 500,000 ETH per year and approximately 0.22 ETH per block.
His next step is to come up with a 500 GB state size to be stored in a node of computer’s RAM which he says will be 1-2 orders of magnitude higher than the actual state size. This is the maximum acceptable state size allotted by him.
Storing 500 GB would cost around 500,000 ETH per year, hence he will charge a fee of 0.000001 ETH per year to store 1 byte of data on the network. A 24000-byte contract would cost 0.024 ETH which amounts to approximately $15 per year and a 250-byte account would cost 0.00025 ETH which is $0.15 per year. He also stated that the maximum acceptable state size would be per-shard and would decrease the above-mentioned fees by a factor of 100.
This decision is to avoid the network from taking costs for storage by itself if too many people use the resource for free. However, Ethereum Project researchers on Twitter have urged a need for core developers to relay this information as soon as possible to the smart contractor community in order to get their opinions on the matter.
Developers are already having issues with this and are asking many questions on Buterin’s blog like:
“Every contract would have to design some mechanism to collect fees from users (eg. token holders) to pay for storage. What if someone doesn’t pay? There are two possibilities; Either their data gets deleted which is potentially worth millions or the tokens gets sold . Sold how? Auction? How long and does that even work for something illiquid? So much complexity.”
To which Buterin replied:
“Users would automatically pre-fill the contracts that store any data relevant to them with a few years of storage whenever they send a transaction related to them. Second-layer markets which are available would be required here to improve performance further, but they are simpler than the second-layer markets that would be required to maintain an acceptable quality of developer and user experience in a no-rent stateless-client-only model”