How Could Vitalik Buterin’s Proposal to Raise Gas Limits Impact Ethereum’s Price?

Who is Vitalik Buterin?

Vitalik Buterin is the co-founder of Ethereum and was something of a prodigy at the time. Now the twenty-nine-years-old he has become a respected businessman.

Buterin distributed a whitepaper in late 2013 that detailed his vision for Ethereum, also known as ETH.

According to reports, Buterin has often wanted to shy away from publicity, fearing that he will be seen as the “Philosopher King” of the cryptocurrency world. His father was quoted as saying,

“He’s not too excited that the community assigns so much importance to him. He wants the community to be more resilient.”

The Gas Limit Price Proposal

On January 11th, Buterin proposed to increase the gas limit by 33%, citing concerns over the forecast growth size of the Blockchain state. He believes the increase will enhance the throughput of Ethereum. The current limit set at 30 million will grow to 40 million, which will in turn allow more transactions per block and build network capacity.

With Ethereum’s inception so did the term “gas limit”. It has already been increased naturally over time and there have been several people like Jesse Pollak, and others at crypto betting sites, who think it’s an excellent idea, stating:

I’m strongly in support of increasing @ethereum gas limit to 40-45m – we have the network headroom and will be beneficial for all parties https://t.co/GQb8SbavAY

— jesse.base.eth (@jessepollak) January 10, 2024

Gas Limit Resistance

The gas limit increase has met resistance within the industry and none more so than Ethereum developer, Marcus van der Wijden, whose key concern on his blog was the impact on the blockchain’s size. 

With no definitive solutions in place for the growth of the state, Wijden’s concerns may need addressing by Buterin.

Van der Wijden was not alone in voicing his concerns as team leader, Peter Szilagyi, pinpointed the trade-offs for the higher gas limits when he said,

“What problem does increasing the gas limit solve? Increasing it definitely has a downside. State will grow faster, sync time will get slower quicker, DoS (disk operating system) potential will grow. Would be nice to have a number on those.”

How Will Ethereum’s Price Be Impacted?

For a while now, we have been seeing Ethereum solid in the market with the Cancun Deneb upgrade due in the early months of 2024.

The price and value have been ticking along nicely with quiet confidence in the undercurrent of new investments. No doubt, the foreseeable future looks a little uncertain for Ethereum now that Vitalik Buterin proposes to raise gas limits.

It would be no surprise if that tempers the recent enthusiasm for a while.

If it indeed does unease community confidence, Ethereum’s price will stall and even fall a little but once that unsettled period is consigned to the past, there is no long-term evidence to believe it is going to be a big issue going forward.

On writing this article, the current price of Ethereum is $2466.80. It may be prudent to show caution in the short term if you are thinking of trading or buying. In the long term, it will be fine to be confident with buying Ethereum (ETH). However, if you are in a rush for short-term profits and yield, sit on your hands for now.

Once the Cancun Deneb upgrade has been completed to allow a more refined service, users will accept a 33% increase in gas limit fees that are being justified by Vitalik Buterin.

For those reasons, we propose that if short-term trading and reliance on those profits is your mantra, then sit tight for the next five or six months to let the upgrade and gas fees settle into the Ethereum portfolio. Then with the future looking brighter and more assured you can step in for short and long-term investment.