One screenshot showed gas fees were as high as $220 for a high-priority transaction on Ethereum while other screenshots showed figures around the $100 mark.
Bitcoin users meanwhile, reported fees that were around $10 for high-priority transactions. While this is relatively low, the average Bitcoin (BTC) transaction cost has hovered around $1 over the last three months, according to BitInfoCharts. BTC fees haven’t been this high since May.
To Add to Below Post
This isn’t even Height of Bull Run
Already #ETH Gas Fees are Extortionate $175.79
2 Live Transactions Now if i Processed Now
— POWELLY (@MPowelly01) November 9, 2023
At the time of writing, a transaction from an Ethereum hot wallet comes with a network cost of $45.65 for a $300 transfer on decentralized exchange Uniswap, according to a test transaction conducted by Cointelegraph.
The rise in gas fees have prompted proponents of Solana and other blockchains to flaunt how much cheaper transactions are on those respective chains.
One X (formerly Twitter) user, “Bobby Apelrod” noted that Solana only charges $55-60 per minute for all Solana users, while each “poor Ethereum user” had to pay that much for a single transaction.
Lol $SOL charged only 1.2 Sol ($55-$60) per min in TOTAL fees for the ENTIRE SOYLANA PLANET
Mental illness imwo pic.twitter.com/WAtxjk1gzH
— Bobby Apelrod / / nicefeet.sol (@tofushit888) November 9, 2023
The price of network fees is dynamic and is a product of demand or how congested the network is. An increase in on-chain activity often occurs in bull markets or when market sentiment is strong, but an added side effect is the impact on lower income users.
It now costs $10 to transfer money on Bitcoin.
How does this help the unbanked and lower income population? pic.twitter.com/0OBKCFZu3E
— Hector Lopez (@hlopez_) November 9, 2023
Prior to the fee spike, transaction costs on Ethereum averaged out at $11.35 on Nov. 8, according to BitInfoCharts. A few weeks earlier on Oct. 14 it fell as low as $1.40 — the lowest level recorded in 2023.
Gas fee on Ethereum peaked at $196 on May. 1, 2022, while fees were consistently above $20 between August 2021 and February 2022.
Scale the base layer or rely on L2s?
Transactions are often less than $1 on these layer 2 networks but not everyone agrees it is the right way to tackle scalability.
Justin Bons, founder of cryptocurrency investment firm Cyber Capital believes the base layer should be the only transaction environment.
L2s are a terrible replacement for L1 scaling
In fact, L2s do not scale the L1 at all; if anything L2s compete with the L1 over fees
Weakening the security & economics of the L1
All while delivering worse UX, lower security & fragmenting liquidity
“L2 scaling” is parasitical!
— Justin Bons (@Justin_Bons) October 28, 2023
He advocates for monolithic blockchain architectures in which consensus, data availability and the transaction execution is all handled on the base layer. Solana is an example of this.
All major scaling methods can be divided into a spectrum with five categories:
— Justin Bons (@Justin_Bons) May 19, 2023
However, critics have pointed to several outages on Solana due to network congestion, arguing that a modular blockchain design is a better approach to solve scalability.