Vitalik Buterin: Ethereum is gearing up to supercharge its throughput as developers continue to work on ETH 2.0 update
The average transaction fee on Ethereum only reached its highest level in nearly two years, as the network struggled under heavy congestion. Meanwhile, Ethereum creator Vitalik Buterin confirmed on June 30 that the Ethereum network would have to work with existing off-chain scaling solutions in the next two years. That was until Ethereum 2.0’s planned scalability was finally released.
Vitalik Buterin offers a temporary two-year replication plan
In the context of the slow increase in the cost of using Ethereum, Vitalik Buterin has provided some insight into the short-term expansion plan for Ethereum 2.0. On June 30, the Ethereum co-founder released this slightly technical brief on how Ethereum and Ethereum 2.0 can expand in the short term.
Buterin tweeted:
ETH2 scaling for data will be available *before* ETH2 scaling for general computation. This implies that rollups will be the dominant scaling paradigm for at least a couple of years: first ~2-3k TPS with eth1 as data layer, then ~100k TPS with eth2 (phase 1). Adjust accordingly.
— vitalik.eth (@VitalikButerin) June 30, 2020
IT means the switch to ETH 2.0 will not happen overnight, but it will eventually lead to the network scaling with the capabilities to handle 100,000 transactions per second (TPS).
In Layman’s terms, Ethereum 2.0 will be able to handle large quantities of data before it gains the ability to compute that data. Therefore, in the interim, a technology is known as ZK-rollups will be used as a stop-gap for the next two years.
ZK-rollups operated by stacking multiple transactions into a single smart-contract, without having to be validated by the main chain. The contract is then validated on the main chain at a later date. This acts as a layer-2 scaling solution for Ethereum since users can retain full functionality, while the strain on the blockchain is eased.
Buterin then advised that new token transfers on Ethereum should consider using the ZK-rollup tool – many of which already exist.
Anyone who’s *just* moving ETH / ERC20 / ERC721 tokens around should be looking at how to get onto a rollup today. Gasprices on base chain would probably fall greatly if it was only used for the more complex stuff.
— vitalik.eth (@VitalikButerin) June 30, 2020
Given that this will cause Ethereum’s average and average transaction fees to decline rapidly, most Ethereum users will likely share Buterin’s sentiments.
The average transaction fee of Ethereum skyrocketed
In the 48 hours before June 30, the average transaction fee on the Ethereum blockchain skyrocketed 60%, up from $ 0.23, to $ 0.37, according to Bitinfocharts. Despite the spike in spikes, it marks the continuation of a trend that has seen the average ETH transaction fee increase 510% since the beginning of the year when the average fee is only $ 0.06.
Source: Bitinfocharts
When calculating the average transaction fee, the sum of all fees is divided by the number of transactions. This statistic can be misleading when trying to figure out the typical cost of using ETH because a few large transactions can push numbers up.
However, the average fee gives a better idea of what fees are paid more commonly by users of Ethereum. In this case, a steady increase in the average transaction fee is a sign that the cost of using the network increases daily.
It could also be a sign that many people are using ETH at the ground level. This is partly supported by data, which shows that the number of Ethereum transactions has increased by 140% since January, along with the decrease in the average ETH transaction value since 2018.
Read more:
- ETH Price Confirmed A Death Cross Formation Could Cause It To Post A Massive Decline In The Coming Days
- Potential Distribution Pattern As A Technical Factor That Could Cause ETH Price To Reel Significantly Lower