Now also at Ethereum: Capacity bottleneck ensures traffic jams on the blockchain
Wait and … You can’t do more with the leading blockchains at the moment. Image: Porcelain Augarten, Vienna: Tee Service Atlantis after Josef Hoffmann, 1930. Recorded by Christoph Kaiser, divided by Flickr.com. License: Creative Commons

In this way, Ethereum has reached the same status in time -lapse as Bitcoin – it runs over capacity. After we have been running the “blocksize debate” at Bitcoin for years, it will be exciting to observe how it works at Ethereum. Ethereum will also bite into an endless argument? Or will the developers quickly find a solution and show Bitcoin how the rabbit runs?

Bad ICO or bad miner?

So far, the discussion of network plug-in through the ICO status is primarily about two points: on the one hand around the ICO itself, which is also referred to as a DOS attack, and on the other hand around the miners that could let through more transactions.

The format of the ICO is increasingly criticized in the Ethereum community. No wonder. So far it has been going on that everyone who wants to participate sends transactions with high fees to a specific address as soon as possible. This not only has the disadvantage that a natural selection takes place in favor of large investors who can pay high fees – but also that it produces an unnatural transaction volume. Because the transactions that it does not make into the ICO still take place. No value is transferred in them. The result: the network is flooded with transactions that compete for the token, and even when they lose, the miners have to be confirmed.

After all, the ICO status has reacted to the first point of criticism. So the developers did not leave the tokens immediately, but over time. However, as was warned in advance, this has the effect that people rewarded people to send transactions again and again in the course of several hours: “A very good method to carry out a DDOS attack on the network.“So one side of the problem is that the ICOS is false.

Another side of the problem, however, is that Ethereum sets a limit of transactions. This works similarly to the Emergent Consensus, which Bitcoin Unlimited proposed, even if the decision on the block size at Ethereum is only the responsibility of the miners. To explain that, I have to go back a piece.

First, Ethereum has no simple size of transactions, such as Bitcoin, but calculates their costs in “gas”. Gas is a unit for the load of the network, for example for arithmetic operations. To use Ethereum, the users have to attach gas to the transaction, as with Bitcoin the fees. The amount of gas is determined by the code. Simple transactions cost relatively little gas, while smart contracts are quickly quite expensive. On the other hand, the price of the gas is flexible, which can result in a fee market as with Bitcoin.

The blocks at Ethereum have no “size limit”, as with Bitcoin, but a “gas limit.“Miners are only allowed to use a certain number of gas. Unlike Bitcoin, however, this limit is flexible. If the miners exhaust it, it increases with each block by about a per thousand. If necessary, the size of the blocks-the gas limit-can be doubled in a few hours.

In itself, Ethereum should easily be able to reduce hanging transactions in a few hours with this flexible capacity limit. The question now is: why did this not happen yesterday? Why did the miners not increase the gas limit?

Part of the answer is last autumn. At that time there were long-lasting DOS attacks on Ethereum. During this time, Vitalik Buterin and the other developers recommended that the gas limit be kept in a corridor around 4.7 million. This corridor has now been reached, but the miners do not seem to be ready to break it, although the cause of the DOS attacks have long been eliminated.

The Ethereum community has therefore started to rage against the miners because they do not increase the limit. The discussion about the role of the miners thus achieves an ironic turn. While Bitcoin Unlimited was accused of leading the miners to the blocksize endlessly if you give them too much, the Ethereum Community is now angry that the miners keep the block size too deep because they have been given too much influence. The miners can’t really make it right for users.

But why do you not raise the corridor that Vitalik Buterin set last autumn? The reasons are difficult. Many miners may not consider it necessary, since the limit has so far only been reached at extreme ICO, and apparently not bypassing the network’s resources sparingly. The miners may also enjoy the higher income, since the users now pay more for the gas. So far, however, the specific is not known.

Either way: Ethereum encounters its capacity limit with a similar number of daily transactions. This will enrich the continued debate about scalability of cryptocurrencies. We are incredibly excited to see how this continues.