High Gas fees are causing real problems for the Ethereum Network. This fee is required for miners to execute transactions. The fee is not constant. It fluctuates. The very founding principle of commerce, supply and demand, determine the fee movements. Gas fees hold enormous power that a transaction can be delayed or even outrightly rejected if it does not meet the miner’s threshold.
The ERC-20 standard initiative uses the Ethereum Blockchain network, which is the benchmark for Ethereum. The token offers to create and issue smart contracts on the Ethereum Blockchain. Some popular ERC-20 tokens include Chainlink(LINK), Tether (USDT), Wrapped Bitcoin(WBTC), and more.
High Ethereum gas fees make it impracticable for ERC-20 projects to run any small-scale microtransaction payments on the Ethereum Network. This defeats the very purpose which made Ethereum “the better choice” from Bitcoin and the very reason because of which Ethereum is what it is today.
Why is GAS soaring? What about Ethereum now?
While Miners would love to see gas fees going to the moon, this adversely affects Ethereum’s status. Many organisations prefer to pay their contractors in the ether because of the cheaper transaction fees. However, this surge in gas prices makes it challenging for organisations to choose Ethereum over others. Thus, leaving no incentive for them to use the ETH network. In the worst case, it could even become a liability.
High gas fees are an opportunity for Ethereum competitors to grab a fair share of the market.
It wouldn’t surprise anyone if following this surge in fee, many people would want to jump boat to better solutions.
On the other hand, it would also be wrong to blame Miners for capitalising on this opportunity. It’s human and business nature to spot opportunities and pounce on them.
Where does this end? Is this the end of Ethereum?
Ethereum 2.0 – Serentity?
The Ethereum 2.0 upgrade, known initially as Serenity, is one of the highly expected updates in the protocol’s history. It will foresee Ethereum switch from Proof-of-Work (PoW) to Proof-of-Stake (PoS).
Due to the accord mechanism, Ethereum can only handle 15 transactions per second compared to VISA’s 1500. The shift to PoS will increase this number for Ethereum.
Also, the migration to PoS will see miners replaced by validators who stake their own ether to maintain the integrity of the network. Miners, sensing that their position is somewhat in danger, are taking this opportunity to jack the fees and maximise their profits.
Now, we just have to sit back and see how it all plays off.