Gas Fee on Ethereum Blockchain

Hello my fellow readers, do you own a car ? If we own a car, then we need to supply it with the fuel because the car need fuel to operating. Same as your car, Ethereum blockchain need the gas as the fee for running the whole network.

Why Ethereum blockchain needs fee ? Well, every coins in cryptocurrency needs fee for the network, we can think it is like a small reward for people who supports the blockchain network behind such as miners, masternodes, stakers, validators, or etc..

Because Ethereum is a Proof of Work (PoW) coin, the fee will goes to the miner who mined the block as reward. The block reward of Ethereum now is 2 ETH. If you are solo mining ETH coin currently, you will get the reward more than the block reward, do you know why ?

That is because the fee on Ethereum network is high at the moment.

Now my question is, why the hell is that happens ? Many people confused about why they need to use high fee when send ETH coin or tokens. Not to mention that many cryptocurrency exchanges has increased their withdrawal fee for ETH coin. That is not because they want to grab profit from the users, but it is because the fee on Ethereum is high.

The root of this problem is because some people using high fee on Ethereum blockchain on their transactions. Actually, there won't be any problem if someone using high gas only for few transactions. The trouble starts when someone using the high gas for all of their transactions continuously.

The Ethereum blockchain works like this, say you want to send ETH coin to other address, then you submit the transaction, and your transaction detail will be broadcasted through the network on the blockchain. Later, the miners of Ethereum will pick up your transaction, and insert it on their block. Your transaction will be done when there are miner who mined the block with your transaction on it.

And, here comes the problem. The Ethereum miners will pick up the transaction which has higher gas fee first, why ? Because the fee will goes to the miners, therefore they will prioritize the transactions which has higher gas than the others to get more profit from mining it, and later they will pick up the transaction with lower fee on the next block.

Currently, Uniswap router and token distributor are the one who using the high gas on Ethereum blockchain. Not only for one or two transactions, but for all of their transactions. (See here : https://etherscan.io/gastracker). We can clearly imagine that there will be a lot of transactions which using high gas fee on Ethereum. Because they using high gas fee, the miners will always prioritize their transactions and put it on the block they mined. Other transactions which using lower gas fee than them will be left behind, resulting many pending transactions on Ethereum blockchain.

Conclusion

I think if people don't stop using high gas fee for their lot of transactions, the network of Ethereum will be always congested and requiring other people to use high gas fee, which is not efficient in cryptocurrency. We are using cryptocurrency to reduce the unnecessary fee from middle man or third party because crypto is decentralized. If we need to pay high fee for using Ethereum, then it won't be different as paying fee for third party.

Author : Juice Shen