Ethereum (ETH) is currently still supported by Proof of Work.
This will change soon with the update to Ethereum 2.0: Then the Ethereum block chain will be verified via Proof of Stake. The picture shows an Ethereum coin standing on a motherboard.
The Ethereum network has now had higher average transaction fees than the Bitcoin Freedom network for 2 months. The block chain fees are one of the biggest challenges. Ethereum users and investors are wondering when the solution will come? – Among other things, this involves an improvement proposal called EIP-1559.
Ethereum fees beat Bitcoin (BTC)
Especially the use and hype around Decentralized Finance (DeFi) has pushed the Ethereum network to its limits. Countless transactions have led to the fact that not only transactions themselves were carried out slowly, but above all, they also had high fees.
A recent tweet from the analysis company Messari on October 8th shows that the longest period of time has now been reached where Ethereum fees are higher than Bitcoin fees.
Especially in August, at the absolute high of DeFi, the Ethereum fees reached their all-time high. Due to the cooling off from the DeFi market, however, the situation has calmed down considerably to this day.
In absolute terms, this means that the Ethereum fees are currently around $2, while the average fee in August-September was around $14.
EIP-1559 and the question of a solution
Ethereum 2.0: This buzzword has been circulating in cryptospace for several months and years now. It refers to the final solution of the scaling debate and problems of Ethereum. But until this is actually implemented, another 2 years will probably pass.
Therefore the question arises how to find a good interim solution. In other words: Are there ways to solve the problems with the fees quickly and satisfactorily?
Last week ConsenSys developer Tim Beiko published the findings of a survey on Ethereum Improvement Proposal 1559.
At the core of this EIP is the idea of implementing a fixed network fee per block and additionally using a „tip“ for miners. A part of the fees would again be burned depending on the congestion level of the block chain.
The survey shows that the majority (60%) supports the project. The remaining 40% are divided into 27% who have a neutral opinion and 13% who reject the project. Logically, it is especially the miners who are critical of the EIP-1559.