"Ethereum is totally unusable because of insane gas fees!" This is a common complaint you'll hear about the second largest blockchain. But while high transaction fees on Ethereum are certainly frustrating, is this really enough to dismiss Ethereum as broken beyond repair? The reality behind gas fees is far more nuanced, as we'll explore in this edition of Crypto FUD Busters.
According to a 2021 poll, 58% of crypto users feel priced out of using Ethereum due to expensive gas fees. This widespread sentiment is understandable - who wants to pay $50 or more to perform a simple transaction? However, condemning Ethereum's entire functionality based on this alone is an oversimplification. When we dig deeper, we uncover a more balanced perspective on Ethereum's gas fee situation.
To start, let's examine the background behind this myth. Ethereum's popularity as a platform for tokens and apps led to growing network congestion which drove up gas prices. The more activity on Ethereum, the more crowded it became. In 2021, gas fees skyrocketed with the NFT craze and DeFi boom. This priced many casual users out of transactions. Understandably, "gas fees are too damn high!" became a common complaint. But there's more to this story.
Myth: Ethereum's fees make it completely unusable.
Fact: High fees impact smaller transactions, but don't affect all uses.
Critics tend to focus on the effects of gas fees on smaller-scale transactions like simple ERC-20 token transfers. But high fees have less impact on larger batch transfers and smart contract interactions. For major operations like minting an NFT drop or executing a DeFi protocol swap, gas costs are manageable relative to transaction size. The network remains usable for its core functions.
Myth: There are no solutions to high Ethereum gas fees.
Fact: Multiple approaches are underway to lower gas fees substantially.
While Ethereum fees are still an issue today, dismissing Ethereum assumes there's no real path to scalability. In reality, solutions are already live or in active development, including:
- Layer 2 rollups like Arbitrum and Optimism that enable 100x+ gas fee reductions.
- Sharding to dramatically increase Ethereum's capacity through parallel chains.
- Proof-of-stake (The Merge) transition to eliminate expensive mining and lower fees.
- EIP-1559 and other upgrades to optimize gas fee market dynamics.
Ethereum's long-term roadmap is expressly designed to deliver massive scalability. Writing off Ethereum due to current gas fees ignores the feasibility of scaling solutions coming soon.
Myth: No one will use Ethereum because fees are so high.
Fact: Usage and development continue reaching all-time highs despite high fees.
If gas fees really rendered Ethereum blockchain unusable, why does usage continue rising? Fees in Summer 2021 exceeded $60 per transaction, yet developer activity hit all-time highs. Major DeFi and NFT projects were built during this period and still thrive today. Congestion-driven fees reflect Ethereum's dominant network effects, not failure. Users are willing to pay higher short-term fees because they recognize Ethereum's value.
Myth: Eth2 and sharding are pipe dreams that will never materialize to lower gas fees.
Fact: Upgrades are achieving measurable progress per publicly-verifiable milestones.
Perhaps the biggest misconception within this myth is the notion that Ethereum's scaling solutions are pure fantasy or hype. In fact, Eth2 upgrades are rolling out gradually, with The Merge to proof-of-stake expected to finalize in 2022. Shard chains and rollup adoption are also visibly moving forward. Milestone progress can be tracked through data-driven analysis, proving solutions are not abstract pipe dreams but rather engineering roadmaps in the process of being realized.
By dispelling this myth, we get a more rational understanding of Ethereum's gas fee situation. Current high fees are a known short-term trade-off, not a permanent limitation. We also recognize that while complaints about gas are valid, declaring Ethereum totally unusable due to this alone relies on an incomplete and distorted portrayal. The reality is Ethereum remains widely used and desired despite high fees because its core utility delivers tremendous value.
Like all emerging technologies, challenges and criticisms should be expected. But the Crypto FUD Busters series aims to move beyond reductive extremes by illuminating a more balanced, nuanced perspective grounded in facts. When it comes to Ethereum's fees, the real story is one of a leading blockchain actively overcoming temporary growing pains en route to even greater decentralized utility.