Ethereum fees continue to skyrocket. The fees for purchasing an NFT from OpenSea are currently over €180 in some cases. The reason for this is not the Opensea platform, but the Ethereum network. The high transaction costs could have far-reaching consequences for the cryptocurrency. But why are the fees so high?
Ethereum and the blockchain dilemma
Like Bitcoin, the Ethereum blockchain is based on the proof-of-work concept. This means that every transaction, such as the purchase of an NFT, requires computing power, which is provided by the "diggers". They are rewarded with Ethereum. Since Ethereum has experienced massive growth in recent years, especially due to the NFT business, the “diggers” cannot keep up. The classic game between supply and demand levels off the price accordingly.
For this reason, the proof-of-work method is now considered obsolete. Concepts such as proof-of-stake are not only more climate-friendly, but also more efficient, cheaper and faster.
Ethereum 2.0
Ethereum 2.0 should solve these problems. The blockchain should be switched to proof-of-stake, increasing efficiency and speed. So far, however, Ethereum 2.0 has not materialized due to delays. Launch dates kept getting pushed back.
Ethereum's chair is shaking
This leads to existential risks for Ethereum and its ecosystem. Due to the NFT boom, smart contracts and other applications, the number of transactions is higher than ever before. However, Ethereum cannot serve this demand. The result:
New players are entering the market. Solana and Cardano in particular are considered by many to be the “better Ethereum”. Both networks work with a more modern blockchain, are faster, cheaper and more efficient. Opensea has already announced that it will also open its platform, which previously ran exclusively on Ethereum, to Solana. If the cryptocurrency does not fix these problems, there is a risk of being booted out by Solana, Cardano and others in the long term.
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