Larry Cermak recently shared a tweet highlighting the growth of transaction fees in the ETH and BTC networks. The research Director of the analytical company The Block claims that there have always been two players in the crypto game.
ETH may lose out to other networks to solve the issue with fees. As we recently reported, last week the total Commission for transactions on the ETH network reached a record high of 6.87 million dollars. This surge exceeded the previous ATH of $ 4.5 million, which was observed during the ICO boom in December 2017.
High fees for ETH are mainly caused by the increase in the price of the coin and the large-scale implementation of decentralized financing projects (DeFi). These factors have led to a strong surge in active users and daily transactions on the blockchain.
Similarly, according to the latest data from Bitinfocharts, fees for sending a transaction via the BTC blockchain have increased sharply over the past month. The average BTC transaction fee increased by about 547% on August 6 and reached $ 6.47.
In comparison, transactions processed using blockchain platforms such as Dash, BCH, and XRP are significantly cheaper. Responding to Cermak’s comments, one Twitter user commented that cryptocurrencies should solve the Commission problem. This will be the only solution if they want to attract more people.
High transaction costs can hinder the implementation of crypto, and long-term and more stable solutions are vital to ensure the viability of various crypto projects. Particularly high costs for ETH prompted Kia Wang, a former product Manager at Messari, to tweet that other highly scalable blockchains could soon topple Ethereum if the 2.0 update is not fully rolled out.
If ETH’s transaction costs prove to be a significant barrier to new DeFi users logging in, other scalable blockchain networks may grow. In fact, other networks, such as Autobahn Network, can attract investors with the promise of fast and cheap transactions. What are the solutions?
In order to soften the retention of high fees, ETH held a vote among miners to increase the gas limit for a single block from 10 million to 12.5 million. Ethereum founder Vitalik Buterin also proposed a system called Ethereum Improvement Proposal 1559 (EIP-1559) to root out the inefficient and unstable auction model that currently determines the platform’s transaction fees. Moreover, Ethereum developers are making every effort to reduce the load on high transaction fees with the help of second-level solutions such as OmiseGo and Starkware. These networks effectively increase scalability and reduce costs.