The recent rise in the price of Ethereum has led to a large-scale congestion on the Ethereum network. Over 1.2 Million transactions are being processed on the Ethereum blockchain every day. To put things into perspective, this is more than all the other transactions on all other cryptocurrencies combined. This has prompted Bittrex to halt creation of new Ethereum deposit addresses for the time being.
The Ethereum network has a high volume of network congestion because it is the base protocol upon which various other decentralized applications run. These apps have many active users performing multiple transactions daily – thereby leading to the rise in the overall number of transactions on the Ethereum blockchain.
Bittrex being the third largest cryptocurrency exchange in the world pausing creation of Ethereum deposit addresses means that there is going to be a significant impact on the number of transactions, easing some load off the network.
Currently, the best way to lower the network congestion levels on the Ethereum blockchain is by the implementation of solutions such as Plasma, Casper and Sharding. Moreover, second-layer scaling techniques can also help. However, the biggest challenge here is that the number of developers working on the Ethereum blockchain aren’t enough. As per Ethereum co-founder Vitalik Buterin, fully scaling this blockchain might take up to five years!
Bittrex has given the reason behind blocking Ethereum deposit addresses as the high transaction fees. The transaction fees has been on an ever-increasing rise over the past few weeks. “Due to incredibly high gas prices, we’re preventing new ETH and asset deposit addresses from being created. Existing deposit addresses will work as normal,” said Bittrex.
Gas is basically the transaction fees paid by apps running on the Ethereum blockchain. As of now Bittrex is the only major exchange to disable these deposit addresses. Exchanges like Binance and Bithumb continue operating as they were.