The Ethereum community is up in arms over delayed transactions, amid claims of “hundreds or even thousands” of pending transactions. It raises questions over whether the smart contracts blockchain can scale adequately to handle thousands of new users.
Additionally, the price of Ethereum’s ether “currency” has skyrocketed even more than bitcoin this year, attracting even more attention. ETH was around $12 USD as recently as February, but now sits at $277.
Ethereum’s market cap from ether alone is $25.77 billion — and that doesn’t include the value of other digital tokens that live on its blockchain.
Projects launching their own tokens is one reason for Ethereum network slowdowns, as investors rush to grab the new offerings. Two weeks ago, the launch for Brave browser’s BAT tokens caused transaction delays of several hours.
Why The Delays?
Ethereum, like Bitcoin, charges transaction fees to perform transactions on its network. The unit used is called “gas”, which also fluctuates in price but is currently around 0.0000000238 ETH. The amount of gas per transaction depends on the amount of data, and a simple transaction costs around 21,000 gas. At current prices that’s about 13 cents.
There’s also a maximum gas limit per transaction block (every 12 seconds) which is currently around 4 million.
“If the number of miners voting for the original gas schedule was less than 50%, then the miners voting 4-4.3 million would overpower the miners voting for the original gas schedule, and the gas limit would stabilize at 4.3 million, like it did previously. If the number of miners voting for the original gas schedule was greater than 67%, then under full-blocks conditions the gas limit would rise.”
“Now, however, we are in a spooky middle zone. The gas limit can rise to 4.7 million, because there are more miners voting 4.7 million than 4 or 4.3 million. But rising above 4.7 million is harder.”
Several miners apparently preferred to keep the gas limit lower as a way to mitigate denial-of-service attacks that plagued the Ethereum network in 2016. However that must now be balanced with the need for extra network capacity as more and more projects come onboard.
Ethereum Scaling Issues Echo Bitcoin and Others
As a “Turing complete” smart contracts platform, Ethereum’s scope is far broader than Bitcoin. However many see only the ether component and tout the token as a cryptocurrency alternative, especially as Bitcoin itself struggles to scale.
Transaction backlogs could dampen this enthusiasm, though. They also highlight the problem any blockchain project will face once it becomes popular — especially if that happens rapidly.
Have you experienced any Ethereum transaction delays? Let us know.
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