During the morning today, we witnessed a collapse in the price of Ethereum (ETH) from $200 to $130 and this is perhaps what caused the congestion of the network.
The bearish movement started at midnight in Europe and peaked at around 11:00 AM when the price of Ethereum plunged from $170 to a low of $130.
On the Ethereum network, there was a sudden increase in transactions, enough to create congestion on the network which was already approaching its limit in terms of transactions per second despite the upgrades of recent months.
The response of exchanges such as Binance to the congestion of Ethereum
Major exchanges have seen a spike in trade and some have suspended withdrawals due to the increase in outstanding transactions, resulting in a surge in the price of GAS.
The CEO of Binance, Changpeng Zhao, promptly posted a tweet today to inform the community of the problem.
— CZ Binance 🔶🔶🔶 (@cz_binance) March 12, 2020
Meanwhile, Coinbase has issued a notification about the delay of transactions on the Ethereum network, while other exchanges such as Huobi have cancelled withdrawals and asked users to try again later.
At the time of writing, the outstanding transactions were around 120000, about twice as much as normal, but the price of GAS is back to normal.
Interestingly, the Uncle Rate, one of the most important indicators of how much load the Ethereum blockchain is able to manage reliably, has remained constant despite the surge in GAS.
This is due to the important work of the developers who have greatly improved the Ethereum clients.
Although this price collapse has put the network to the test, Ethereum 1.0 has once again proven its resilience.
Meanwhile, the release date of Ethereum 2.0 seems to be getting closer and closer with its new consensus algorithm: Proof of Stake.
In fact, Vitalik Buterin recently stated in an interview that phase zero of the Ethereum 2.0 project is almost ready to go and could be launched during the summer of 2020.