The ETH transaction fees remain high even after a long time has passed since the 2017 bull run which led to the increase in fees to multiple blockchains including Ethereum and Bitcoin. Now, users demand solutions fast as we are reading further in the following ethereum price news.
At one time in history, it cost $50 to send one BTC from a wallet to a wallet in a reasonable amount of time. Then, it cost a few dollars to create a Cryptokitty on the ETH blockchain so while both of the networks saw major technical improvements, the ETH transaction fees remain high as it was seen over the past few weeks. Back in May, some analysts started noticing that the spending of Ethereum was starting to become very expensive. One data analyst noted that the cost of gas on ETH reached 41 Gwei which is a 300% increase from weeks earlier and over 1000% increase compared to the start of this year.
Gas prices on Ethereum have been skyrocketing over the past month. Average gas price is now 41 Gwei, up 4x since end of April.
It uses oscillates between 10-15 outside of high periods of stress (i.e. Black Thursday). pic.twitter.com/RJmdquQNdC
— Ceteris Paribus (@ceterispar1bus) May 15, 2020
This increase persisted with the cost of gas trending around 25-30 Gwei as of the time of writing. Su Zhu, the CIO of Three Arrows Capital wrote:
“[I] have spent more money for gas on ethereum than gas in real life for quite a few days now.”
Like with Bitcoin, the high transaction fees on Ethereum seem to skyrocket even further when there’s an increase in demand to see the cryptocurrency. The increase in fees leads to many discussions regarding scalability. The decentralized exchange 1inch.exchange suggested that Ethereum miners should increase the block limit in order to get more transactions every 14 seconds as now the block size is limited to 10 million.
Should @Ethereum miner increase block limit size?#DeFi
— 1inch.exchange (@1inchExchange) June 4, 2020
There could be a few reasons for this trend in high transaction fees but it mainly boils down to three major reasons. There is more demand to send coins between exchanges because of the recent volatility. There has also been an explosion in the popularity of Ethereum-based Ponzi schemes that cost thousands of dollars and also, stablecoins have continued to see mass adoption on Ethereum with not being more than $7 billion worth of USD based on the blockchain.
Bitcoin has been having similar issues with high transaction fees. Some don’t see this as a huge problem as Bitcoin doesn’t have the same use case as Ethereum. But some high fees can be a byproduct of the chain’s extremely robust security.
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