Ethereum is next to Bitcoin in terms of market share in the world of cryptocurrencies. Founded in 2013 by Vitalic Butkarin, the virtual currency uses a cryptocurrency called Ether. Coins are also used as a means of payment.
Etherium is not managed by any central system. With this currency, various works are done including investment and various agreements. Etherium is commonly used in ‘smart contracts’. A smart contract is a transaction protocol or program that automatically fulfills the terms of that contract.
This currency has been traded since 2016 and currently occupies 26 percent of the virtual currency world. According to a report by Deutsche Bank Wealth Management, no more than 16 million ethers are approved each year. Demand for ether is increasing every year due to limited approvals and the relative inflation rate is low. It basically uses Ethas Mining algorithm.
But the problem is, Etherium transfer fees are relatively high.
The top blockchains, Bitcoin and Ethereum, during the 2013 bull run, were subject to extremely high transaction fees.
At one time, sending BTC from wallet to wallet at standard time cost 50. And once in the Ethereum blockchain you have to spend a handful of dollars to create a “cryptocurrency”.
Although technological advances have been made since both networks, fees have still been seen as a topic of further rocketing over the past few weeks.
Determining Ethereum's high transaction fees
In early May, analysts began to notice that etherium was starting to become more expensive to spend.
As of May 15, the price of gas in Ethereum has risen to 41 Gui - a 300% increase from just a few weeks ago and to more than 1,000% in early 2020, according to a space data analyst.
It remains stable with gas costs around 25-30 Gwei trend as of the time of writing this article. As Su Zhu, CIO of Three Arrows Capital, wrote in a recent tweet: "[I] have spent more money on gas in etherium than gas in real life for several days."
Like BTC, Ethereum faces higher transaction fees when the demand for cryptocurrency remittances increases.
There has been talk of scalability as a result of the fee increase.
Decentralized Exchange 1 Inch Exchange suggested that Etherium Miners should increase the block limit for further transactions every 14 seconds (each block). Currently, the block size is limited to 1 crore but the exchange is proposed up to 10 million.
According to the survey, 26.5.5% of the respondents wanted the option of limiting 100 million blocks, while 100.2% wanted 50 million and 1.6.2..50% wanted 25 million. The rest voted in favor of the "no" option.
There are several reasons behind this trend in high transaction fees, although it highlights three main reasons:
There is more demand for remittance of coins in the exchange due to recent unrest.
There has been an explosion in the popularity of etherium-based register schemes / scams. One is called “ETH” and it has spent thousands of dollars on transactions over the past few days.
Stablecoins continue to be widely accepted in Ethereum, which is now valued at $ 7 billion based on blockchain.
Bitcoin has the same problem with Ethereum
Relevantly, Bitcoin was coming up with similar “issues” including higher transaction fees.
Many do not see cryptocurrency as an immediate problem, as BTC does not have the use of etherium. And some see high fees as a by-product of the chain's extremely strong (and incomparable) protection.
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