Ethereum is 'killing itself,' costing users thousands of dollars for every transaction


  • Ethereum has settled over $6.2 trillion worth of transactions over the past 12 months, despite a spike in gas fees.
  • Analysts argue that Vitalik Buterin once stated that "the internet of money should not cost 5 cents a transaction."
  • Ethereum-killers like Avalanche, Solana and Cardano are likely to takeover the altcoin in the months before "The Merge."

Ethereum is expected to transition to proof-of-stake (POS) in late 2021 or early 2022. Until then, traders fight the uphill battle of rising transaction fees. 

Avalanche, Solana and Cardano became popular as Ethereum-killers, but the altcoin is killing itself

Ethereum is months away from its transition to PoS, in “The Merge.” Until then, traders on the Ethereum network suffer from high fees on the network. Proponents on Twitter condone the complaints on transaction fees, however analysts consider this more than a rant. 

A cryptocurrency trader @HukAleksandra tweeted earlier today, 

Aleksandra is referring to Ethereum co-founder Vitalik Buterin’s statement,

The Internet of Money should not cost 5 cents per transaction.

Buterin has proposed the use of rollups for low transaction costs in the past. Though rollups may solve the altcoin’s scalability problem, they increase the reliance on others. 

Decentralization is at the core of the Ethereum network. Rollups literally “roll up” transactions into a single block and reduce the congestion in the ETH network by centralizing it to a certain extent.

The price that traders pay for faster and cheaper transactions is a “certain degree of centralization” in the process. 

The debate on fees continues since the Ethereum network has processed over $6.2 trillion worth of transactions over the past year. 

Ethereum transactions settled over the past twelve months.

Ethereum transactions settled over the past twelve months.

Alongside these developments on the Ethereum network, alternatives like Avalanche, Solana and Cardano have noted a spike in demand and market capitalization. Popular as Ethereum-killers, these cryptocurrencies have emerged as cheaper and faster alternatives to the Ethereum networks and thousands of decentralized applications have chosen AVAX, SOL or ADA ecosystem to develop their projects. 

Until “The Merge,” Ethereum holders and traders are expected to suffer from high transaction fees on the network. 

FXStreet analysts have evaluated ETH price trend and predicted that the altcoin has positioned itself for a bullish breakout. 

 


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Three reasons why Chainlink could rally

Three reasons why Chainlink could rally

Chainlink has noted accumulation by large wallet investors for the past two weeks. Nearly $110 million in LINK has been withdrawn from exchanges in this time period. LINK sustained above $13 on Sunday, extending gains by nearly 1%. 

More Chainlink News

Ripple holds on to double-digit gains, highest in top 20 cryptocurrencies

Ripple holds on to double-digit gains, highest in top 20 cryptocurrencies

Ripple rallied over 19% in the past seven days per CoinGecko data. The altcoin broke past resistance at $0.50 on the one-year anniversary of Judge Analisa Torres’ XRP ruling. 

More Ripple News

Bitcoin breaks $60,000 as market anticipates re-election of pro-crypto former President Trump

Bitcoin breaks $60,000 as market anticipates re-election of pro-crypto former President Trump

Bitcoin extended gains post the shooting at the rally of US Presidential candidate Donald Trump. The former President is a pro-crypto candidate, and a report by Fortune shows that Trump’s chances of winning the race increased after the Saturday events.

More Bitcoin News

Ethereum ETF launch could push Ether to new all-time high, on one condition

Ethereum ETF launch could push Ether to new all-time high, on one condition

Ethereum (ETH) traders are watching two key events closely: the anticipated approval of the Spot Ether ETF and the activities of whales, the large wallet investors holding ETH. An analyst has predicted that the odds of Spot Ether ETF is 72.7% this week. 

More Ethereum News

Bitcoin: Investors wonder if BTC troubles are behind

Bitcoin: Investors wonder if BTC troubles are behind

Bitcoin (BTC) stabilized around the $57,000 mark this week, while the German Government persists in transferring Bitcoin to exchanges. Concurrently, US spot Bitcoin ETFs have recorded inflows. On-chain analytics indicate that whales are accumulating BTC during dips, potentially foreshadowing an imminent rally in the days ahead.

 

Read full analysis

BTC

ETH

XRP