Currently, some transactions on the Ethereum network cost as much as $100 and this remains a big concern for traders as they spend a lot in gas fees.
Gas fees are the fees required for transactions to be executed and validated by miners. The gas fee is an essential part of the Ethereum network and is dynamic as it fluctuates depending on network demand.
Adebayo Juwon, African Lead at FTX, a leading crypto exchange in an exclusive interview with Nairametrics gave key reasons why such costs are usually high;
“Sometimes, a transaction can experience a delay or total rejection if it does not meet the miners’ threshold. This threshold is dependent on two factors-network usages and congestion. Congested networks benefit miners more as they can charge excessive-high gas fees.
“Paying as high as a $60 fee on a single Uniswap transaction or a $10 to $40 fee just to withdraw an asset from a cryptocurrency exchange nullifies one of the important goals of blockchain technology which is ensuring minimal transaction fees traditional financial systems,” Juwon said.
That is wholly responsible for why Ethereum miners are most certainly smiling to the bank now. This reaction is triggered by transaction costs on the Ethereum network recently reaching a new hourly record.
Data retrieved from Glassnode, a crypto analytics firm, revealed that ETH miners on the network earned a staggering $3.5 million in just one hour.
#Ethereum miners earned $3.5M (!) in a single hour – the highest hourly revenue to date.
What you must know: Ethereum Mining is a computationally in-depth work that requires a lot of computing time. An Ethereum miner gets rewarded for providing solutions to complex mathematical problems via blockchain technology.
At the moment, low capital traders may have no other option than to abandon blockchain transactions for the big guys because, in most cases, the little profit made may not be able to cover blockchain fees, especially during the withdrawal of crypto assets as all cryptocurrency exchanges charge standard Ethereum gas fee on all withdrawals.
The incessant hikes in Ethereum gas prices are turning the cryptocurrency ecosystem into an adventure exclusively for the Whales but fortunately, a thing like a Zero withdrawal fee ensures everyone has equal opportunity to be part of this ecosystem.