Gas fees on Ethereum surged beyond $200 for high-priority transactions in the past 24 hours, reigniting discussions on scalability solutions and the role of layer 2 solutions. The spike in transaction fees on both Ethereum and Bitcoin has prompted users to question the efficiency of the current network structures.
Cryptocurrency users shared screenshots revealing double and occasionally triple-digit transaction fees on Ethereum and Bitcoin over the last day. Notably, gas fees reached as high as $220 for a high-priority Ethereum transaction, with other instances showing fees around the $100 mark. Meanwhile, Bitcoin users reported fees of approximately $10 for high-priority transactions, a notable increase compared to the average transaction cost of around $1 over the last three months.
This surge in gas fees led supporters of alternative blockchains like Solana to emphasize the cost-effectiveness of transactions on their respective networks. One user pointed out that Solana charges only $55-60 per minute for all users, contrasting sharply with Ethereum, where a single transaction can cost as much for an individual user.
“#PulseChain gas fees are currently 4,000 times cheaper than Ethereum and 14,000 times cheaper than Bitcoin,” claimed another user, underlining the growing interest in exploring alternatives to alleviate transaction cost concerns.
The dynamic nature of network fees, influenced by demand and network congestion, often impacts lower-income users. This has raised questions about the broader implications for financial inclusion, as illustrated by concerns expressed in a post regarding a “high-priority” Bitcoin transaction fee of $10.50.
Before the recent fee spike, Ethereum transaction costs averaged $11.35 on November 8, while a few weeks earlier, on October 14, they hit a low of $1.40—the lowest recorded in 2023. Comparatively, gas fees on Ethereum peaked at $196 on May 1, 2022, with fees consistently above $20 between August 2021 and February 2022.
Both Bitcoin and Ethereum developers have chosen to prioritize decentralization and security at the base layer, relying on layer 2 solutions like the Lightning Network for Bitcoin and various layer 2s like Arbitrum, Optimism, and Polygon for Ethereum to make transactions cheaper.
While transactions on these layer 2 networks are often less than $1, not everyone agrees that this approach is the best way to address scalability. Advocates for monolithic blockchain architectures, where consensus, data availability, and transaction execution occur on the base layer, point to Solana as an example of a successful alternative.
However, critics argue that Solana’s modular blockchain design has faced challenges, including network outages due to congestion, suggesting that a combination of base layer and layer 2 solutions may offer a more robust approach to scalability.
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