CryptoCosm: Navigating the Nebula of Transaction Fees

In the swirling currents of recent developments, the cryptocurrency landscape finds itself grappling with the repercussions of a notable surge in transaction fees for both Ethereum and Bitcoin. The community is once again immersed in fervent discussions about scalability solutions and the evolving role of layer 2 platforms.

Over the past 24 hours, users have eagerly shared screenshots capturing transaction fees that seem to defy gravity, reaching not just double but occasionally triple digits for both Ethereum and Bitcoin. Gas fees on Ethereum, akin to a skyrocketing comet, reached an astronomical $220 for high-priority transactions, while other snapshots showcased figures dancing around the $100 mark. Meanwhile, Bitcoin users reported fees of approximately $10 for high-priority transactions – a seemingly modest amount, yet a departure from the tranquility of the $1 average observed over the last three months, as documented by BitInfoCharts. This fee surge marks the highest since the crypto cosmos witnessed the bloom of May.

#Saitama #SaitaRealty

To Add to Below Post

This isn't even Height of Bull Run

Already #ETH Gas Fees are Extortionate $175.79

This is why 1st Chance I get my #SaitaRealty #Saitama Will Go on #BNB Chain

2 Live Transactions Now if i Processed Now

One on #ETH Gas Fee is… https://t.co/GYZy6L78Ku pic.twitter.com/JnOzNCK35X

— POWELLY (@MPowelly01) November 9, 2023

In this cosmic ballet, conducting a $300 transfer on the decentralized Uniswap through an Ethereum hot wallet now incurs a network cost of $45.65, a celestial toll unveiled in a recent test transaction.

Network cost on Ethereum hot wallet Rabby Wallet. Source: Rabby Wallet 

This cosmic ballet has prompted proponents of alternative blockchains, with Solana at the forefront, to extol the cost-effectiveness of transactions on their celestial domains. A celestial bard on X (formerly Twitter), under the moniker "Bobby Apelrod," artfully pointed out that Solana levies only $55-60 per minute for all its users, while every Ethereum user had to part with a comparable sum for a single transaction. 

Lol $SOL charged only 1.2 Sol ($55-$60) per min in TOTAL fees for the ENTIRE SOYLANA PLANET

while the median gas fee on $ETH spiked to 160+ gwei, charging each poor ethereum user US$60 fees PER transaction

????

Mental illness imwo pic.twitter.com/WAtxjk1gzH

— Bobby Apelrod / / nicefeet.sol (@tofushit888) November 9, 2023

Meanwhile, "KaisaCrypto," a celestial soothsayer, boldly proclaimed, "Currently, #PulseChain gas fees are 4,000X cheaper than Ethereum and 14,000X cheaper than Bitcoin."

Yet, amid this celestial symphony, the dynamic interplay of network fees emerges as a cosmic dance, intricately choreographed by the forces of demand and network congestion. The surge in on-chain constellations, often observed during bullish epochs, casts unintended shadows on lower-income users, prompting reflections from luminaries like Lopez. In a post unveiling a "high priority" Bitcoin transaction fee of $10.50 on Nov. 9, Lopez posed a poignant question: How do these cosmic phenomena align with the noble pursuit of assisting the unbanked and lower-income denizens of the financial galaxy?

It now costs $10 to transfer money on Bitcoin.

How does this help the unbanked and lower income population? pic.twitter.com/0OBKCFZu3E

— Hector Lopez (@hlopez_) November 9, 2023

Before the recent fee meteor shower, Ethereum's transaction costs averaged $11.35 on Nov. 8, as per the star maps at BitInfoCharts. Conversely, on Oct. 14, the costs descended to a mere $1.40, marking the lowest recorded level in this epoch of 2023.

Should the focus be on expanding the foundational layer or depending on Layer 2 solutions?

The ongoing celestial debate revolves around the pivotal question of whether to ascend the heights of the base layer or entrust the cosmic journey to layer 2 solutions. Developers for Bitcoin and Ethereum, much like cosmic architects, have chosen to prioritize decentralization and security at the base layer while entrusting a significant part of the execution environment to layer 2s for enhanced cost-effectiveness.

In the cosmic arsenal, the Lightning Network emerges as Bitcoin's trusted starship, while Ethereum employs an array of layer 2 constellations – Arbitrum, Optimism, and Polygon – to quicken its pace and reduce the gravitational pull of costs. Transactions within these celestial realms often cost less than $1, though divergent celestial voices question the efficacy of this approach in navigating the vast expanse of scalability challenges.

L2s are a terrible replacement for L1 scaling

In fact, L2s do not scale the L1 at all; if anything L2s compete with the L1 over fees

Weakening the security & economics of the L1

All while delivering worse UX, lower security & fragmenting liquidity

"L2 scaling" is parasitical!

— Justin Bons (@Justin_Bons) October 28, 2023

Justin Bons, a cosmic philosopher and founder of Cyber Capital, advocates for a monolithic blockchain architecture – a celestial citadel where consensus, data availability, and transaction execution coalesce on the base layer. Solana, a shining beacon in this cosmic tapestry, embodies this ethos. In contrast, Bitcoin and Ethereum sail on modular cosmic vessels, gracefully offloading certain transactions to a secondary layer.

All major scaling methods can be divided into a spectrum with five categories:

1. Modular side chains: ATOM, DOT, AVAX
2. Modular layer two: BTC, ETH, ADA
3. Monolithic enshrined roll-ups: XTZ
4. Monolithic execution sharding: EGLD, NEAR, TON
5. Monolithic single chain: SOL, BSV

— Justin Bons (@Justin_Bons) May 19, 2023

However, cosmic critics point to Solana's occasional eclipses due to network congestion, contending that a modular blockchain design may be the chosen celestial path to resolving scalability challenges. As the celestial saga unfolds, the crypto cosmos eagerly anticipates the next chapter in this ever-evolving cosmic narrative.

Read more: Crypto Odyssey: Peaks and Puzzles