Will your vehicles run without fuel? Could your machines run without power? Of course, no! ethereum (eth) blockchain is no exception. the critical energy source for this digital asset is ethereum gas. what’s up with that? when are ethereum gas fees lowest what are the possible alternatives? wow! enough questions! Let’s look for some answers.
Reading: When is ethereum gas cheapest
ethereum gas rates
ethereum is an open source decentralized blockchain that supports smart contract functionality. the currency of the platform is called ether.
Ethereum gas fee is rising again, draining everyone’s wallets. With average gas fees for ethereum transactions hovering around $63 in 2021, ethereum transactions cost 20 times more than the industry average. Ethereum is becoming prohibitively expensive to use, making it unsuitable for most low-value transactions.
so what are ethereum gas fees?
gas fees in ethereum represent the cost of keeping the network operational. eth transactions are subject to a fee charged in gas. gas rates vary according to supply and demand, set by the miners.
It depends on factors such as the gas market, the computing power needed for smart contracts, the volume of transactions, the size of the smart contract, etc.
crypto investors are actually looking for ways to pay lower ethereum gas fees to execute transactions. but, a low amount of gas can cause a transaction to fail.
In other words, the miners do not receive a sufficient reward for accepting and adding that transaction to the ledger. Gas is often expressed in gwei, which is the name for eth.
One gigawei (gwei) is 1,000,000,000 wei, where wei is the smallest base unit of ether. one wei is equal to 10^18 eth (0.000000000000000001 eth). therefore, 1 ether is equal to 1 billion gwei.
Okay, that’s fuzzy math. Let’s explore why eth fluctuates, including exorbitant gas, and what is required to run smart contracts.
what about eth gas rate fluctuations?
The supply and demand of ethereum gas fees determine prices most of the time. if miners don’t like the price of gas, they can decline a transaction. as a result, gas prices fluctuate according to relative computational power.
The “ethereum gas limit” thus comes into play. your gas limit is the maximum amount you will spend on a transaction. gas limits let ethereum miners know that a transaction needs more work and in other cases can also cause miners to overlook your transaction. Gas prices are high on certain days and times for this reason.
Let’s break it down with some examples. You order x food for y amount of money. Similarly, a credit card swipe x amount charges you a percentage y of the amount in processing fees.
In both directions, x measures the utility and y indicates the cost of an action. On the network, a smart contract can have an ether value of x, where y is the price of gas. Simply put, ethereum miners get paid back for their computing efforts.
What are the reasons for these high fees?
When there is a high volume of activity, gas rates can increase and transactions can fail. what is the cause of these difficulties?
the popularity of ethereum, perhaps.
experts estimate that the value of ethereum will increase by 400% in 2022. gas fees increase as demand for ethereum increases. the platform needs more computing power to keep up with the growth, so miners favor transactions with higher gas fees.
defi is responsible
ethereum: the first blockchain to create smart contracts. this created an opportunity for many developers to modify the app, leading to the creation of decentralized apps. the popularity of blockchain-based applications clogged the web and gasoline prices increased.
defi was a major contributor to the rise in eth gas prices during 2020. ethereum’s main consensus mechanism is proof of work (pow), which is a prohibitive base that does not scale. With an average of 15 transactions per second, transaction fees increase with network performance.
New investors are making their way into the world of nfts through platforms like rarible and opensea. Do you remember the day the cryptokitties dapp was launched in 2017? the high activity on the chain simply choked the ethereum network.
The event caused ethereum network traffic to hit all-time highs and significantly slowed down the platform as gas fees increased from 0.002 eth to 0.008 eth. it also contributed to nft inflation and skyrocketing gas prices, prompting investors to find the cheapest gas rate options.
when are eth transaction fees lowest?
so how do you save some money on all your ethereum transactions? what if we say that there are some best times and days to transact the lowest gas rates? and if there are other possible solutions?
weekdays, 1 a.m. m. and 5 a.m. m. (utc) is the rush hour and the most expensive. Of course, it is working time for most of the United States and Europe. Compared to that, the least crowded time is between 9 and 11 p.m. m. (UTC) When most Americans are asleep, Europe is just getting started and Asia is finishing the job.
eth is cheapest on Saturday and Sunday from 6am to 5pm. m. to 7 a.m. m. (utc); that’s when you should do an eth transaction. however, the worst times for the network are Tuesdays and Thursdays, when network traffic is at its peak and gas rates are at their highest.
In other words, delaying making purchases or paying less for low-priority transactions helps, as you’ll receive confirmation shortly that your transaction has been processed.
what are other possible solutions to reduce ethereum gas fees?
schedule your trades wisely.
Although the average cost of an ethereum transaction can vary significantly throughout the day or week, it is generally high.
So if you don’t feel an immediate threat to wait for the transaction, you’re only saving 50% on gas fees. check the time slots above where network traffic is low and make your payments.
Layer 2 solutions can feel your pain.
Layer 2 solutions can make trading easy, efficient, reliable and scalable. In a Layer 2 solution, transaction processing is offloaded to another network and subsequent results are finalized on the Ethereum mainchain. more details are waiting here!
other l1 blockchains are waiting for you here!
2021 “Ethereum killers”, or blockchains with ultra-low transaction fees and faster transaction speeds than Ethereum, were the most profitable sectors in that year. As these low-cost blockchains have grown in popularity and attracted users, the corresponding ecosystem has also grown exponentially. The most popular low-cost blockchains are Avalanche and Solana.
then, that’s it. either sticking to less popular times or switching to alternative solutions is the key at the moment. but has the popularity of ethereum gone down? we doubt it. despite the high transaction fees, users still believe that it is the best platform. let’s see what the future holds. in the meantime, we still want to feed your fiery minds. grab a coffee and stay tuned for more exciting information, only at bitscrunch!