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A sharp increase in transaction fees across networks and has reignited discussions about blockchain scalability, according to data provided by BitInfoCharts on November 10, 2023. High-priority transactions on Ethereum have seen gas fees rise to a record $220, while similar transactions on Bitcoin brought in fees of $10 – a significant increase from the average fee of $1 over the previous three months.
Rising fees have led users to migrate their assets to cheaper networks such as BNB Chain, and proponents of alternative blockchains such as PulseChain and PulseChain have highlighted their lower transaction costs. Solana reportedly charges a total of $55 to $60 per minute for all users, while Ethereum’s individual transaction fees are high.
Concerns have also been raised about the impact of these high fees on unbanked and low-income populations. A test transaction on , a decentralized exchange, via an Ethereum e-wallet required a network cost of $45.65 for a $300 transfer, raising questions about its accessibility for these groups.
Before this increase, the average cost of a transaction on Ethereum was around $11.35. Gas fees previously peaked at $196 on May 1, 2022, and remained consistently above $20 from August 2021 to February 2022.
To address scalability issues, Bitcoin and Ethereum developers prioritized decentralization and security at the base layer, moving much of the runtime environment to solutions layer 2, such as the Lightning Network for Bitcoin and Arbitrum, Optimism and Polygon for Ethereum. Critics argue for monolithic blockchain architectures where everything is managed at the base layer.
The main causes of this escalation of fees are market demand and network congestion. As the debate continues, it remains to be seen how blockchain networks will address these challenges to ensure accessibility and affordability for all users.
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