Ethereum is open access to digital money and data-friendly services for everyone – no matter your background or location. It's a community-built technology behind the cryptocurrency Ether (ETH) and thousands of applications you can use today.
Lately, transaction fees on the Ethereum blockchain are continuing to rise, making it more expensive to send transactions or use decentralized apps (dapps) on the network. Both critics and supporters of Ethereum have conceded the issue.
According to Etherscan, Ethereum gas used continue to rise since 2018 and almost reaching 80B this year. Transaction fees are used to pay for operations on the network, such as transactions, smart contracts, decentralized applications and others which are measured in Gas. If gas prices rise, they become more costly to use.
There are limits to transaction fees. But recently, they pushed up the limit from 10 million to 12.5 million, where it currently stands—giving the network an extra 25% boost.
The US-dollar backed stablecoin Tether, is the main cause of the inflation, which resulted in $2.4 million of transaction fees in the last month, according to EthGasStation. Other causes are decentralized exchanges, dapps, and at least one suspected Ponzi Scheme.
Last July, co-founder of NEO (a rival blockchain platform), Da Hongfei tweeted about the ridiculous expensive cost of Ethereum gas fee which became an obstacle to defi transactions.
Ethereum is making progress towards solving the issue on the base layer (by making the network inherently more scalable) but it will take time.
Yet even this won’t solve the problem straight away. According to Ethereum co-founder Vitalik Buterin, the main upgrades that will make Ethereum more scalable will come a few years down the line.
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very helpful and informative article. Thanks for sharing :)