As a DeFi user, one of the foremost things on your mind would be how to avoid Ethereum’s high gas price issue. Ethereum, like all cryptocurrencies, operates on a blockchain network. A blockchain is a decentralized, distributed public ledger that verifies and records all transactions.
It is distributed in the sense that everyone on the Ethereum network has an identical copy of this ledger, allowing them to observe all previous transactions. It is decentralized in the sense that the network is not administered or maintained by a centralized entity, but rather by all of the distributed ledgers.
Gas takes into account the computational effort, bandwidth, and space required to determine the fees required to complete each transaction. These fees are what motivate Ethereum miners to put in the necessary effort to keep the network running. Visit the ethereum code website to find out more information about the ethereum network. To effectively perform a transaction on the Ethereum blockchain network, gas expenses are necessary. If you’ve performed a transaction on the Ethereum blockchain in the last several months, you’ve undoubtedly been surprised by the additional charge known as a gas cost.
Why is the Price of Ethereum Gas So High?
Ethereum was created as a “global cloud computer” that would change the way digital entities interact with one another. It was first introduced with lots of network space for transactions (computing activities). It sure looked impossible for it to become a pricey affair. However, the case is different today as the network has become overcrowded. The price of Ethereum’s network currency, Ether, has constantly increased, whilst the “gas” quantity, which represents the total number of compute units accessible in each block, has become a rare resource. Ethereum’s “gas” rates, like petrol and diesel prices in many areas right now, have become prohibitively costly in practice.
As the most frequently used blockchain protocol and owing to an expanding number of initiatives in fields such as DeFi, Ethereum appears to be in a condition where the whole world is attempting to push its computational activities into an increasingly troublesome bottleneck.
There is only roughly 20 transactions per second available on the network, but the demand is several orders of magnitude more. This slows down the network and makes individual transactions prohibitively costly. Many people are unable to use the cloud computer of the future and the standard-bearer for blockchain technology.
Reasons to Keep Using Ethereum
Before we get into alternatives, it’s worth noting that Ethereum’s popularity as the industry standard implies that they will eventually find a solution to this chronic throughput problem. When this happens, projects that require the ubiquity and access provided by Ethereum should stay close to the platform’s protocols. A number of projects are already in the works to enhance throughput and/or minimize transaction costs. One possible option is “sharding,” which allows transactions to be processed in parallel.
Another advantage of opting for Ethereum is that the community is large, and blockchain initiatives require significant support to keep the protocols, tools, and so on running. A significant flaw was recently discovered and repaired as a result of the efforts of this community. Because blockchain and cryptocurrencies are fundamentally social enterprises, the more individuals who contribute to a project, the better. On Ethereum, all of these updates and maintenance operations are free.
This is a significant advantage over other commercial blockchains where you must pay for this service or private blockchains where you must do it yourself.
Choosing the Best Blockchain for Your Needs
As you may be aware, the high transaction fees and poor performance of the Ethereum blockchain are prohibitive and have even killed off several projects that were founded when transaction costs were a tiny fraction of what they are now. And, although it’s true that there have been periods when transactions were much greater than they are today (September 2021), for certain firms that process thousands of transactions per day, even a $1 transaction charge is simply too much.
This is especially true when considering applications such as micro-transactions. With this in mind, it’s not surprising that projects are already migrating to alternate chains, and there are several to select from that do similar things as of today.
Choosing the right blockchain, like choosing a vehicle or any other piece of technology, is always about finding the optimum balance of features and constraints. Each project will have unique requirements that will necessitate the use of a certain blockchain. However, the most typical factors are always privacy, transaction throughput (speed), transaction cost, safety, security, and so on. Different qualities are prioritized by different chains.
One method for increasing throughput is to avoid sharing your computer processes with everyone. In such an instance, you could use a network designed for a limited audience, or perhaps establish your own private chain. There are several options for private chains, such as using a Hybrid Blockchain, which allows you to store your data on both the public and private chains.
The ideal solution would be to keep Ethereum’s strong community and stability without the need to pay exorbitant gas prices or deal with congestion.
And there you have it. Our tips on how to avoid Etereum’s high gas fee issues. Kindly drop your thoughts, tips, and questions in the comments section below. Thanks for your time!
