Transaction Congestion on the Ethereum Network Cost up to $15 Million

Transaction Congestion on the Ethereum Network Cost up to $15 Million

The Ethereum Network has been experiencing severe transaction congestion and traffic, which indicates that the spam attacks to the network may be back. These spams originated from thousands of transactions from ERC20 smart contracts that were backed by no projects. Vitalik Buterin, the founded of Ethereum tweeted that the estimated cost of the transaction spam is estimated to be $15 million.

An ethereum developer, Justo says that the ETH spam is because of EOS. According to him, a series of token ‘airdrops’ resulted in high gas prices. EOS is seen to be a direct competitor of Ethereum and Justo accused EOS of intentionally attacking Ethereum. He said in an interview,

Every day up until the launch of the EOS platform, which was June 6th, gas prices increased due to “Airdrop” tokens. Thousands of random tokens, with no website, or bootstrapped template websites made in hours. Wasting hundreds of ethereum daily, hundreds of thousands of dollars to drop tokens. This happened up until the launch of EOS, on the 6th, then immediately stopped. In one day, gas prices dropped back to normal.

In response to this, Dan Larimer, the CEO of Block.One took to telegram to refute this accusation stating that EOS played no role in manipulating gas prices. He said,

I can assure you block one wouldn’t be so stupid to spend our resources attacking eth when all it takes is crypto kitties. There are far smarter and more cost-effective ways of bringing eth down if that were the goal.

Regardless of the role of EOS, Buterin’s tweet did estimate that $15 million was incurred because of this spam. He also made some interesting comparisons such as the money is equivalent to 5 million green teas or 75 Lamborghinis or 25 Coinbase seed rounds. He also stated that because of the free market system he cannot stop anyone from using the ETH blockchain, but he was ‘wowed’ by the congestion and the cost.

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Pallavi Janiani

Pallavi Janiani

Content Writer
I am studying Business and psychology at the university of Minnesota. Apart from learning about how the economy and the human mind works, I spend my time dancing with my bollywood fusion team, reading, writing, traveling, usually with a cup of coffee in my hand.