Ethereum transactions have been fluctuating daily, now falling below 500k for the first time in 5 months. Between June 30th and July 2nd, the transaction fees rose to nearly $1.
The resulting congestion on the Ethereum network has influenced Binance to spike their GAS price on the withdrawals to the 180 Gwei, i.e. 0.00000018 Ether, with no change in withdrawal fees.
In response to this, Vitalik Buterin, the Co-Founder of Ethereum has proposed a refined way of implementing a maximum GAS price. With the current user-centric process adopted by Ethereum and Bitcoin, wherein the highest fee in comparison to others is included, the issue remains the lack of motivation on the users’ part to post a higher-than-average fee. All running dApps are affected by the volatility of Ethereum’s transaction fee.
Vitalik Buterin said:
“If you value a transaction getting included right now at $1, you would be willing to bid anything up to $1, but if everyone else is bidding $0.05, then you could keep more money by biding $0.08 instead.”
Buterin’s most recent proposal is a price auction for this fee model where the users bid a price of their choice for the inclusion of their transaction. Once the auction is over, the lowest fee the miner is able to accommodate will be applied to everyone.
With this new system, the scope for earning increases for miners as they are able to manipulate the price by stating a minimum amount of blocks where their transactions will occur, instead of a system where they are needed to specify a particular fee. The main idea is the preservation of a minimum transaction fee.
While this failure has made many people skeptical, Ethereum continues to be widely popular and supported by its loyal followers.
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