Philip Salter is the head of mining operations at Genesis Mining.
Due to a clogged network, Ethereum just got an expansion — but at what cost?
Increased activity on the Ethereum blockchain in mid-2020 caused a slowdown of the network, which in turn caused increasing transaction fees — and a slow, expensive network isn’t good for Ethereum’s growth.
The proposed solution was to increase the gas limit to 12,500,000 in order to cause more capacity, which was voted upon and passed by the mining community. But it’s not just as simple as resetting the limit, because while it may play out well for some in the Ethereum community, it may mean the end for some node operators. Will this debate lead to a fork for Ethereum, like it did for Bitcoin?
Scaling Issues and Gas Limits
The recent increase in activity has been due to the flourishing of DeFi, or decentralized finance, which are applications and services that run on the Ethereum blockchain. DeFi provides and facilitates a number of financial services, including decentralized exchanges, lending, smart contracts, tokenized deeds, and more. All of these transactions need to be added to the blockchain as well, which causes congestion.
The issue of a slow network stems from scaling, which is the current challenge for cryptocurrencies across the board. How can you increase transactions validated on a