The Ethereum gas cost reached 41 Gwei which is an increase of about 300% since the end of April as we are now reading more in the latest Ethereum news.
While both Ethereum and Bitcoin got strong technical improvements since the last bull run in 2017, the gas cost of these blockchains still can’t handle a lot of stress without the fees going crazy high. This was made perfectly clear over the past few days as many noted that the average transaction fees on both ETH and BTC have skyrocketed.
If this is happening on Rinkeby, then what will happen to gas price and blocks when Reddit launches this on mainnet?
Won’t we just have another CryptoKitties moment? https://t.co/XgPFETtSjw
— Brian Flynn (@Flynnjamm) May 14, 2020
As it was seen by the market analyst Ceteris Paribus, the Ethereum gas cost reached 41 Gwei while most of the time, the gwei cost of gas is around 10 but it often falls lower between 4-6. It is hard to tell what is causing this but there are two possible causes. First, the explosion in popularity of a scam named MMM which spent more than 661 ETH in transaction fees the previous month. The scam was affiliated with the second-most used contract by fees over the past month.
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
Also, Tether’s USDT continued to see mass adoption on Ethereum and most of the supply existed on the blockchain. Because of the increased market volatility, USDT is being used a lot more than it was a month ago. The transaction fees on the Bitcoin network surged over the past week with a combination of slower block times and an increase in demand forcing the average transaction fee to $5.161. What could be happening is because the transactions are slow on the Bitcoin blockchain, the users that look to transfer value between exchanges to play the market are now buying ETH or USDT with their bitcoins.
There’s no way to tell if this clog is going to continue over the year. Reddit is aiming to roll Ethereum tokens on the ETH mainnet which could clog the blockchain even more. The innovators, however, are coming up with the solutions for the network clog. Decentralized finance protocol Synthetix and Optimism started beta-testing a scaling system named Optimistic Rollups which will compress the data and will migrate the onus of transaction validation off-chain. There are other rollup projects that now under development that could help Ethereum to scale.
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