Ethereum Fees Falls by 3 Percent, 700000 Transactions Yesterday
Ethereum has seen a spike in transactions from around 450,000 on July 15th to just above 700,000 yesterday. The network has now returned to normal in what looks like a very sharp V recovery, with transactions processed in seconds for mere pennies.
The network is operating at half of its full capacity under normal conditions, thus fees have returned to just three cents.
Fees increased recently very considerably through what can be considered as an intentional or unintentional exploit of the way gas is calculated in ethereum.
For a very brief tutorial, gas in ethereum is a unit of measurement for computations. One such gas unit currently has a very low cost of 3 gwei, with 1 gwei being one billionth of an eth.
For a simple eth transaction, it costs 21,000 gas units, thus 21k x 3. However, if you are sending an ethereum based token, it costs between 50k to 100k gas units.
A final point to make is the network gas limit, which currently stands at 8 million gas units per block. That network gas limit corresponds to the amount of network resources that can be utilized without increasing orphan rates called uncles.
When ethereum was handling 1.4 million transactions under normal conditions, uncles rose to about 2,000 per day. When ethereum was recently handling about 500,000 transactions where most of such transactions were token transfers, the network was at full capacity with all gas consumed, but uncle rates were at around 1,000, the same level as if it was normal eth transactions.
That suggests token transfers are around the same size in bytes as normal eth transactions and further suggests it is only the amount of bytes transferred that affects uncles.
Miners thus could have safely increased the gas limit, but lazy or greedy miners, of course, didn’t. A more important point perhaps is to say that this shows just how much inefficiency there currently exists in these still very new blockchains.
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