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Sharp rise in Ethereum commissions

May 8, 2020

It’s something we’ve seen on other occasions, and it seems to repeat itself in the middle of a bullish price rally: the problem of high fees for processing transactions in the Ethereum network.

Some researchers have announced that one of the major limitations of the main altcoin network in the crypto market is accurate The high fees for network congestion can be as high as $ 40.

In this context, CoinMetrics expert Nate Madry said when he tried to send an operation, The recommended commission exceeded $ 40. In other blocks, the commission was $ 30. The expert said the blocks on the Ethereum network were almost fully completed in November.

Sharp rise in Ethereum commissionsSharp rise in Ethereum commissions

Experts admit several reasons for such a sharp rise in commissions. This can be for example an increase in the difficulty of mining coins due to the so-called “ice age”. This function is expected to be postponed again. As a result, the creation of cryptocurrency blocks is slowed down.

Another possible reason is the so-called DeFi or products in the area of ​​decentralized financing. The drop in Ethereum from $ 185 to $ 145 per coin in just one week led to the closing of the credit positions. In addition, DeFi contracts can be used to pay high commissions at any given time to take the necessary actions.

Another version is the release of ERC-271 tokens, which are intended for the collector’s market. In any case, Tether is the primary consumer of resources on the Ethereum network. Previously, the total volume of transactions with USDT was over $ 100 billion, which is 6 thousand percent more than at the beginning of the year.

In May the Ethereum exposure was at its maximum, then the blockchain load exceeded the 94% mark at a time when its operations were noticeably lower, about 84%.

Expert: It only takes a year for the Tron coin to surpass the Ethereum

Bitcoins developer Udi Wertheimer found this out in just one year Tron will be able to overtake Ethereum and take the lead among the decentralized programs. Someone saw his words as trolling.

Wertheimer noted: “Tron will try to be one step ahead of Ethereum in 2020. I’m not kidding. The guys from DeFi don’t understand, but after buying ConsenSys, they’ll work in Justin’s favor.”

The Bitcoin developer made its prediction after tron ​​creator Justin Sun announced plans to partner the cryptocurrency with the trading platform Poloniex.

Wertheimer confirmed that he owns part of the encryption exchange. Trust that Tron is ahead of Ethereum in terms of development, resistance to censorship and speed of operation and has a vision for the business.

Many commentators have viewed such statements as trolling. They also reported that Tron has a mixed reputation, as does his boss Justin Sun.

Why Ethereum can lose to Tron and EOS

Several experts believe that Ethereum will gradually lose its market share and other promising altcoins will take its place.

Kyle Samani of Multicoin Capital believes that Ethereum is actively losing its leading position among the decentralized application platforms. He is certain that other projects that offer similar solutions to users have been developed in recent months. All of this will lead to a decline in demand for Ethereum in the long term. It still ranks second in terms of capitalization.

Patrick Barile, senior manager at DappRadar, said the structure of the decentralized software market has changed significantly. For example right now 28% of users of such apps prefer Ethereum-based solutions. More than a year ago, this platform was an absolute monopoly in its field.

Today EOS owns 48% of active decentralized app customers, while Tron only has 24%. When we talk about the total number of dApps, Ethereum confidently takes the lead. The platform owns 40% of all applications on the market, followed by Tron and EOS with 30%.

Barile noted: “”The reason for the popularity of other platforms is the innovative protocols, which enable faster transactions“”

Travis Kling, founder of the Ikigai Hedge Fund, pointed out that Ethereum experts are not going to simply give up. Developers are considering how to improve network bandwidth and increase operational speed. Significant updates to the protocol are planned for the coming months. Mr. Kling concluded: “Climbing in the Ethereum is a long process. It is not easy to implement.”

Samson Mow called Ethereum a technological dead end

Samson Mow, a Bitcoin maximalist and director of Blockstream, actively criticized Ethereum’s intelligent contract service. The main reason is poor scalability.

The letter of intent regards Ethereum as a technological dead end and hopes that it will no longer exist. He said on one of the social networks: “The more Ethereum is used, the faster it will die.”

Bloomberg published an article that states the currency Tether accounts for 90% of the use of the Ethereum network. This can lead to a significant increase in commissions. This leads to a user exit.

Samson MoE commented, “USDT can also be used in Liquid Network. This network is scalable. In the future, it can use Lightning Network technology for tether-like assets.”

Vitalik Buterin defended these allegations. He noticed that the Bitcoin blockchain is also crowded.

This is not the first time that experts have buried Ethereum. However, the second largest cryptocurrency has repeatedly regained its positions. Many believe that it is now time to buy coins. If the exchange rate rises, they can be sold with a good margin in the future. Another option is to keep the coins long-term. The Ethereum price is currently above two dozen levels for a few days.

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