By Shelly Melancon (Switzerland)
The rise of cryptocurrencies has been exceptionally strong this year. Blockchain networks have seen increased use and adoption as more developers and crypto firms build solutions powered by blockchain. But some challenges still impede the full growth of crypto. One of those is the high transaction fees that users have to pay on native blockchains.
On the challenge of high transaction costs, Ethereum, the second-largest blockchain in crypto, is perhaps the worst culprit of all. Gas fees on Ethereum have been known to exceed comfortable expectations, leading users to pay sometimes more for less. It has been a challenge for some time now, given that Ethereum became the blockchain of choice for building DeFi projects.
To address that challenge, a number of solutions have been tried; from network upgrades to the launch of protocols that encourage cross-chain operations, and using wrapped tokens. But a new solution is on the horizon. The co-founder of Ethereum, Vitalik Buterin, has proposed that the total transaction “calldata” in a single Ethereum block be reduced.
Buterin said that doing that would reduce the strenuous transactional effects that have made Ethereum a worrisome network for sending tokens. Buterin also noted that it could be a short-term solution and that the reduction of calldata must be done to prevent a security risk.
Also read:High Gas Fees Has “Slowed” Ethereum’s Growth
Although Ethereum is widely regarded as the top blockchain for building DeFi solutions, it is gradually losing that position to newer blockchains such as Solana and Cardano. Three of the biggest reasons for that are Ethereum’s slower speed, network congestion, and high gas fees. They have contributed to the relatively slower growth that Ethereum has experienced so far.
Although Ethereum is younger than Bitcoin, analysts have expected its token, ETH, to rise in value beyond the present $4891 all-time high price. But the token has failed to hit higher prices, a situation attributed to a growing dislike by new developers. DeFi, NFT, and metaverse developers are looking towards other blockchains with lightning-fast transaction speed and lower costs of the transaction.
Fortunately, the solution proposed by Buterin will increase Ethereum’s scalability and retain its security integrity. But Ethereum network users might have to wait for an upgrade to be released -if Buterin’s proposal does get the nod- before they can enjoy that solution. But Buterin’s proposal is not the only option that Ethereum developers are loo
The developers are also looking at deploying a Soft Limit protocol. This would set a limit to the amount of Ethereum network resources that are used during transactions. But this has the disadvantage of increasing the total fees of NFT sales. Ethereum’s community has taken to discussing the options to decide which would be best for them.
As cryptocurrency marches towards global acceptance, issues such as high network gas fees must be addressed permanently. For example, Ethereum earlier introduced a second-layer protocol to lower gas fees but it has gradually become ineffective due to growing use. Only permanent solutions would encourage the global adoption of digital tokens.
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