The Ethereum network has become so jammed up lately that many transactions are taking hours – with occasional ones even taking days.
The network has been hovering at, or near, capacity for some time.
The culprit appears to be the Ethereum version of Tether (USDT-ETH) which now accounts for between 25% to 50% of the network’s usage.
On Wednesday, the blockchain got flooded with 100,000 Tether transactions in around seven hours.
At the time of writing, that figure had eased to 100,000 transactions in about 16 hours.
Introduced early last year to Ethereum the controversial stablecoin is making a rapid transition from having the bulk of coins on the original Omni Layer version, to having them on the Ethereum one.
“The transition from USDT to USDT-ETH is happening relatively quickly, with USDT-ETH poised to surpass USDT in most major metrics over the coming months,” Coinmetrics wrote recently.
This will make the network even more congested.
Adding fuel to the fire, Tether has just launched a Chinese Yuan version of the stablecoin to run on Ethereum.
It’s not all Tether’s fault – a decentralized gambling platform called FairWin is also gobbling up huge amounts of capacity according to Gas Station.
Ethereum is also incredibly popular with many other DApp developers.
Coinmetrics data shows the Ethereum blockchain regularly processes double the number of transactions as Bitcoin – around 600,000 to 700,000 a day.
However, it’s processed many more in the past without grinding to a halt – it was doing around 1.4 million during the all-time high.
The difference in maximum transactions can be explained by the fact that tokens such as Tether gobble up more ‘gas’ than simple transaction do.
Gas is essentially a unit that measures how much work an action, or series of actions, take – which is then charged accordingly for a transaction.
The current limit of 8 million gas has not changed since January 2018 – around the time Tether moved in.
There are now calls for an increase in the “gas limit” – which will effectively increase the blocksize.
To compare it to Bitcoin, which has a 1-2MB blocksize every ten minutes, Ethereum works out to around 800kb.
For it to increase, the various mining pools will need to vote and agree on any change, although that doesn’t seem in their interests right now.
A lot of the gas issues will be fixed in the upcoming Istanbul upgrade.
Istanbul will open the doors for Ethereum 2.0 which will hopefully start solving the major scaling issues from early next year.
Once there’s more capacity, what currently looks like “congestion” will instead look like “popularity.”
Speaking in relation to Ethereum co-founder Vitalik Buterin’s comment that the blockchain is nearly full, eToro Senior Analyst Mati Greenspan commented:
“If the blockchain is almost full, uh, that means that a lot of people are still using it, right? So let’s not, let’s not lose sight of what’s happening.”
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