Ethereum 2.0 and no more miners: the effect on ethereum transaction costs otherwise called gas price.

• Now that ethereum has transitioned to proof of stake, and there are no more miners gas prices have fallen quite a lot.
• While some are attributing this to proof of stake, mathematically the first effect of the merge per Vitallic's papers is a 4x improvement in tranactional speed, but gas prices are still determined by supply and demand as in "the number of transactions which want to ride a given created block."
• And every independent website reporting transactional volume on the ethereum blockchain is reporting a large drop in transactions.
• This drop has nothing to do with proof of stake and everything to do with proof of stake.
• One of the biggest daily uses of ethereum transactional volume was pools paying miners.
• And I don't mean the large 1000 mining rig companies, I mean individual miners running mining rigs at home.
• I mined ethereum using four mining rigs, so this meant I got paid several small increments of ETH several times a day.
• I was not alone.
• There were thousands of ethereum miners, and the majority joined a pool, and the majority were paid several daily payments of ethereum, and each of these were a transaction.
• Then thousands of miners sent ethereum to cryptocurrency exchanges to sell or to the wallets to save, resulting in thousands of more transactions.
• Thus thousands of miners getting paid several times a day meant thousands of transactions on the ethereum blockchain, and they all stopped overnight in the transition from proof of work to proof of stake.
• What does this sudden, huge drop in transactional volume due to supply and demand? It drops the demand in the wake of increased supply. This is one thing which caused lower gas prices.

It's complicated

• Of course lower gas prices are multi-causal, but I think people focused on the whales and mining companies, forgetting the effect of the small ethereum miners, who were part of large ethereum mining pools. These represent thousands of daily transactions and the proof of theory is indeed the greatly lower number of transactional volume.
• Now we wait to see what industry moves in to take advantage of lower gas prices.
• I am guessing it's NFTs, whats your guess?

@shortsegments

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