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September 22, 2020
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Ethereum transaction fees rise wildly

Both Ethereum supporters and rivals acknowledge that fees are getting out of control, but no solution is being used.

Transaction fees on the Ethereum blockchain continue to rise, making it more expensive to send transactions and use decentralized apps (dapps) on the network. Both critics and Ethereum supporters admitted the problem.

Such transactions are measured in Gas and used to pay for network operations involving smart contracts, dapps and other things. Most platforms running on Ethereum use Gasthen, if its price goes up, its use becomes more expensive.

Demand for Ethereum operations remains persistently high. Daily use of Gas is hitting its historic high and has been above the 70 billion mark since last month. This is an increase of almost 2x compared to the beginning of the year.

According to Etherscan, the network used 74.033 billion Gas on July 18, a historic high when measured in Gas (but not in dollars), and came very close to that with 74.015 billion Gas ($ 1.4 million) yesterday (22).

Co-founder of rival blockchain platform NEO, Da Hongfei, also commented on the case.

Ethereum’s Gas rate is approaching its record high. This ridiculously expensive cost becomes a major deterrent for users and an obstacle to defi transactions. It is a golden opportunity for alternative solutions to stand out.

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It’s not just the critics who are concerned

Even Ethereum supporters themselves recognize that there is a problem that needs to be solved.

“DeFi and Ethereum are not ready for mass adoption right now – because if you are dealing with it today, then you are a pioneer in new technology. This is just pure reality, it will improve over time ”, tweeted Anthony Sassano, co-founder of the EthHub platform, in a discussion about fees Gas.

There are limits to transaction fees. Only a certain amount of Gas can be paid per block. However, miners can gradually increase the limits, gradually increasing the Gas in each block. Recently, they raised the limit from 10 million to 12.5 million, where it is today boosting the network by 25%.

The main reason is Tether, the US dollar-backed stablecoin, which resulted in $ 2.4 million in transaction fees last month, as EthGasStation. Other reasons are decentralized exchanges, dapps and at least one supposed Ponzi scheme.

Ethereum is making progress in solving the issue at its root (by making the network inherently more scalable) but it will take time. The final testnet for the next update will be launched in two weeks and will run for three months. After that, it will become active.

However, this will not solve the problem immediately. According to Vitalik Buterin, co-founder of Ethereum, the biggest updates that will make Ethereum more scalable will come out in a few years. Earlier this month, he said second-tier technology will be needed to solve the problem.

But until applications start using it, and unless nothing changes, Ethereum’s fees will continue to rise.

Source: Decrypt

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