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The new EIP-2878 would reduce block rewards by 75% and has received sharp criticism from Ethereum miners

A new Ethereum improvement proposal (EIP) has met with stiff criticism from miners that the people behind the proposal are less concerned with the security of the network and more focused on the interests of investors. Specifically, EIP-2878 proposes that block rewards be reduced by 75%, from 2 ETH per block down to 0.5 ETH. The rationale behind this EIP is to bring Ethereum’s inflation rate closer into line with Bitcoin and to preserve ETH purchasing power.

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A 51% attack would be a probable outcome for the Ethereum network

ConsenSys CEO John Lilic and Ledger Global Director of Client Success Jerome de Tychey were shared along with an in-depth explanation on the Ethereum Magicians forum, where developers and miners can discuss its validity.

Miners, especially GPU users, were quick to criticize the EIP for the block reward dropped more than twice as much as the network’s previous percentage drop and said a 51% attack would be a result could happen.

PegaSys Product Manager, Time Beiko believes that this is much too dramatic of a change, given we’ve gone from 5 to 3 (-40%), then 3 to 2 (-33%), now you are going from 2 to 0.5 (-75%).

He stated:

“The biggest consideration, in my opinion, should be the security of the network (i.e. how do we ensure the likelihood of 51% attacks remains low, how do we keep a diverse set of miners on the network, etc.).”

Another user responded to this suggestion as follows:

“ASICs are highly profitable compared to GPUs. Any reduction in block rewards without an algo change will remove the rest of the GPUs from the network resulting in ASICs totally controlling the network.”

Bit Capital Group CEO and Co-Founder Jimmy Thommes explain Ethereum should be trying to ape Bitcoin’s inflation rate as it was an older network that was trying to achieve different things.

Not to mention, the proposal made miners feel like they were being used:

“It feels really bad to be treated as a necessary evil to be paid out the minimum possible to incentivize us to keep our lights on just long enough to make the transition to 2.0 work.”

In principle, the majority are not opposed to Halving since Ethereum does not have a built-in halving mechanism like Bitcoin and therefore relies on EIPs to control inflation with the proposed reward reductions. But most suggest dropping to 1.5 or 1 ETH is more justified.

One Reddit user said that while miners made a lot of money in 2017, that won’t affect current earnings:

“Did they let the miners make way too much money in 2017 and 2018? You bet. Does starving them now make that ok? I don’t really think so.”

Another user added that the proposal was not well-timed as Tether’s switch to OMG would significantly reduce the fees paid to miners. According to Ethereum developer Hudson Jameson, the proposal is still relatively new and has little community support.

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