The fees for transactions on the Ethereum blockchain still seem to be too high, limiting the use of ETH to the wealthiest users.
According to a tweet by crypto-investor Lark Davis, the cause of this is the explosion of the NFT (Non-fungible token) market.
#ethereum fees are going insane with the #nft markets pumping like crazy!
We are now seeing spikes in gas fees that make ETH basically unusable for all but the richest users.
— Lark Davis (@TheCryptoLark) August 10, 2021
“Ethereum fees are going insane with the NFT markets pumping like crazy! We are now seeing spikes in gas fees that make ETH basically unusable for all but the richest users”.
The transactions reported in the tweet are the following:
- Very fast: $167.02 for 2 seconds
- Fast: $73.50 for 1 minute
- Standard: $46.73 for 3 minutes
- Slow: $21.36 for more than 10 minutes
And indeed, if auctions for NFT collectible digital works are mostly based on the ERC-721 standard and therefore on Ethereum’s blockchain, being able to choose the transaction speed based on the price of gas or GWEI could become a problem for some users.
In another tweet, Lark calls Ethereum the London/New York of the crypto industry.
“Ethereum is becoming the London / New York of crypto. Everyone wants to get that downtown penthouse, but not many can afford it. Those that can, do, those that can’t grumble about high prices. But I don’t think anyone wants to see ETH as nothing but a playground for the rich”.
Yet the current state of the Ethereum Average Transaction Fee is not that worrisome, when compared to the peaks seen last May 2021. In practice, considering yesterday’s latest recorded figure, the average rate for ETH fees is $5.422 compared to $69.43 on 12 May and $71.72 on 21 May.
Ethereum’s London fork and the impact on transaction fees
Last week, the Ethereum London fork took place, exactly at block 12,965,000, mined at 12:33 UTC.
The update, which is an important step for the conversion to Ethereum 2.0, passing from a PoW protocol to PoS, also involves changes to the current status of fees.
In practice, thanks to changes in EIP-1559, there should be a partial burn of fees, i.e. on every transaction on the current Ethereum blockchain, there should be a burn of the basic fee.
Yet, despite the discrimination between rich and poor users when it comes to using ETH, the price of the smart contract crypto par excellence is on a bull run, exceeding $3000.