Scaling solutions are saving Ethereum
Gas fees and slow transaction times are hindering Ethereum's usability, but scaling solutions provide the answer for now
Ethereum is so slow and expensive, but there is a solution
For the past few months, web3 and Ethereum communities have been buzzing about this issue. Anyone who has used Ethereum in the past year will have noticed how slow the transactions are, and even more noticeable, how expensive the gas fees are.
The reason is simple. The number of transactions that are occurring on Ethereum has sharply increased. The Ethereum blockchain is slow, and can only handle ~13 transactions per second. With more people using Ethereum the longer you have to wait for your transaction to be processed and the fees required to facilitate these transactions is extremely high.
Let’s break it down with an analogy
Imagine Ethereum is a road and a transaction is a car. In order to access the road, you must pay a toll otherwise known as a gas fee. The price of that toll is contingent on the amount of people who want to use the road, so if it's relatively empty the toll will be inexpensive, but if lots of people are using it, it is expensive.
In the past, there were only a few cars being driven down the road, so it was relatively quick and the tolls were inexpensive. However, this past year the number of people using Ethereum has sharply increased. Now, there is almost always a traffic jam to get onto the road.
As a result, the tolls are extremely expensive, and you have to wait for the cars in the line ahead of you to get onto the road first. This can take a while.
It’s frustrating, especially since the tolls can easily be over $100. As a result, users are moving to other blockchains or roads that are faster and less expensive.
However there are solutions to solve for this, specifically scaling solutions.
Scaling solutions use different methods to facilitate network transactions off of the Ethereum blockchain and in doing so, alleviate network congestion.
Scaling solutions provide additional lanes parallel to the main road where cars can access and drive much more quickly for much less money while still getting to where they need to go. Scaling solutions will process the transaction and afterwards move the completed transaction back on Ethereum.
Basically, the car can drive on one of these expedited side lanes, and then move back onto the main road, bypassing all of the traffic in the process.
In order to access these new roads, the company who has built on Ethereum must move their transactions from the main road, to the side lanes. You as a driver can’t choose to use a scaling solution, but you can use a company that provides access to scaling solutions such as Binance and CoinBase.
Companies like Polygon create these scaling solutions for Ethereum.
They currently work with established companies, start-ups, and developers who are building on Ethereum. For example, one of Polygon’s clients is DraftKings, the largest fantasy sports service in the United States.
DraftKings launched their NFT marketplace in August 2021. They have scheduled NFT drops customers can bid on and purchase such as collectable cards, digital signatures from famous celebrities, and more.
Since they have decided to use a scaling solution rather to process transactions, they will have a number of benefits such as:
When a user buys and NFT, they will receive it in a matter of seconds
If there is a popular drop, let’s say a one-of-a-kind Tom Brady autograph, and there are a lot of users on the site, it will still be able to handle all of the transactions very quickly
The transaction fees will be negligible
So yes, Ethereum is facing many challenges as a result of the increase of transactions, however, there are many solutions that developers can use to address this problem. If all of the programs built on Ethereum moved to a scaling solution, we wouldn’t have to worry about high gas fees or slow transaction speeds.
So if you’re looking to do a transaction on Ethereum, first see if it’s possible to do that transaction through a company that uses a scaling solution.
You’ll thank me when you see how low the gas fees are.