Ethereum Network - expensive to use

2 17

Written by

BA and MSc in Political Sciences. Political analyst. Post-conflict states, non-state organ... [more]

3 years ago

In community: Cryptocurrency(66bf)

Topics: Money, Cryptocurrency, Ethereum, BCH

The use of the Ethereum network has recently reached its highest point of all time, but the increasing use of gas can cause problems for the cryptocurrency network.

According to the latest Delphi Digital report, the gas used on the Ethereum blockchain has reached an all-time high and it seems that this number will increase. Gas is the tool used to collect taxes for the Ethereum blockchain and its general use has been steadily increasing since the beginning of 2020.

On the Ethereum network, transaction fees and smart contracts (Ethereum network) are set by the required gas and its current price. This mechanism allows the dynamism of taxes, which may differ from the price of ether (ETH). The amount of gas used in a transaction is determined by its computational complexity. On the other hand, the gas price - expressed in ether - is chosen by the person performing the transaction. The final price is set by the ether miners, who on the basis of the gas price accept or reject the transactions.

The leading role of the USDT and decentralized exchanges

Although gas usage is record-breaking, Ethereum blockchain transactions are far from performing well. More precisely, the values of January 4, 2018, when a record number of 1,349,890 transactions was reached.

This means that the recent increase in gas use comes from greater use of smart contracts - they are more complex and require more gas.

According to ETH Gas Station, the recent use comes largely from the USDT, with gas taxes being spent about $ 1.61 million. Other expenses are due to DeFi applications, scams and Ponzi schemes. From the point of view of the average gas price, USDT also leads, with 35.5 Gwei.

After the USDT stablecoin, decentralized exchanges (DEX) also seem to be becoming quite popular. DappRadar data shows that IDEX is the most frequently used dapp in terms of the number of transactions, and together with Kyber it is in the top 3 of the Ethereum network.