Ether (ETH), the second largest cryptocurrency by market cap, bounced back to an all-time high on April 2 when the spot price for each unit of ETH was above $ 2,000.
Meanwhile, the ominous specter of Ethereum’s impractical transaction costs made its mark again as the cost of using the blockchain has risen 77% in recent days, in line with a 31% rise in the ETH coin price.
Ether recorded eight of the past nine days of green candles, as the coin price rose from a recent low of $ 1,530 on March 26 to the $ 2,009 valuation at the time of publication.
Transaction costs were up 77% over the same period, while the average transaction costs on Ethereum increased from $ 12.96 to $ 22.97, according to data from Bitinfocharts.com.
The average reimbursement figures often give an inaccurate picture of the reimbursements that are most often paid in the chain, due to high-value outliers. Median transaction costs, providing a clearer indication of the fees paid most often, also increased 91% over the past week, from $ 6.66 to $ 12.74.
Few would disagree that in the online world of dollar donations and subcent gratuities, the kind of costs incurred on popular chains like Ethereum and Bitcoin, where the average fee is currently around $ 8.50, not really fit for purpose.
With this in mind, developers have put forward EIP-1559, an Ethereum improvement proposal that will overhaul the way fees are calculated on the blockchain. When the upgrade is rolled out next July, transaction costs will be dynamically adjusted algorithmically. At the same time, a deflationary aspect will be introduced to Ethereum’s tokenomics, burning up some of the network costs after each transaction.
In the longer term, Ethereum will move to one proof of stake consensus algorithm, which causes the current proof-of-work system to be completely abandoned. In PoS blockchains, coin holders deploy coins to secure the network in exchange for passive income, unlike miners who contribute computing power in the pursuit of block rewards. The new consensus algorithm is being implemented as part of Ethereum’s ongoing upgrade to Eth 2.0