Usage of the ethereum network is not far off from the peak of prices with some 950,000 transactions processed yesterday.
That’s the highest level of ‘legitimate’ usage since the very peak in early 2018 when it reached 1,350,000 transactions in one day.
The chart above shows a slightly higher local peak during summer last year but that was ‘fake’ in as far as it was more aidrops by random projects no one heard of or cared about, rather than ‘legitimate’ usage where people send eth to each other or to a dapp.
The May 2018 peak however was legitimate, reaching almost precisely one million transactions a day during a dead cat bounce when eth’s price went as far as $800.
Inflation since then has clearly done its thing with the price now far lower despite the same level of usage, although it is increasing somewhat to maybe near $240. Spartans’ $300 of course being the big test if it heads that way.
The peak there in July 2018 when fees reached $5.50 is fake in as far as it wasn’t due to capacity constrains.
We can’t recall why there was that brief peak, however, but suspect there was some dapp or airdrop eating up all the gas, thus artificially lowering capacity.
The highest average fees have legitimately reached therefore was during January 2018 when they went to $2.9.
Currently they are just about 50 cent on average including contract transactions and normal transactions. Just for a simple movement of eth, however, they’re at less than 20 cent.
That means they’re about the same as in May 2018 when transactions were at the same level, so clearly little has changed in two years where base capacity is concerned.
Nor are we to expect a change based on the roadmap for maybe another two years at best, but ethereum may be starting to utilize a little bit more a fairly unique joker card it has.
That being zk-tech. This is a fairly new invention that began being tested last year, and has seen some live deployment this year in Loopring for example.
Conceptually the idea is very simple. You create a contract that itself keeps accounts through zk-tech then tell the blockchain in one transaction how ownership has changed only after thousands of transactions – as in account ownership changes – in the smart contract.
For a simple transfer from Amy to Bell this realistically probably is not practical because you have to lock in there more than you need to use so as to keep it for next time you want to transact and Bell needs to first come to the smart contract, all creating significant barriers.
If the dapp itself however is this zk smart contract, then it’s like using any dapp. There’s no difference. Well, there are actually differences but good ones because zk dapps are probably a lot more convenient in as far as you need to deal with the slow expensive blockchain only once.
Then once your eth is inside, you can move it around the contract as much as you like and pretty much instantly and also pretty much free, with then the blockchain again at the end being like closing the account.
Currently this isn’t possible in bitcoin and is not being utilized in any other chain as far as we know, but for eth the tech is there now. It’s just about these devs that raised billions for their yachts getting on with implementing it and preferably now or yesterday.
That’s because fees don’t really rise until capacity is hit. Once it reaches that level, then the fee auction model easily sends them parabolically up. Meaning your dapp would be pretty much unusable, and so everyone would go to the one that has zk tech in it.
As dapps have a pretty nice business model in taking a cut from transactions, there are thus clear incentives and competitive forces at play that will pretty much force the adoption for dapps of this contract only account ownership changes that then settle on the blockchain.
So for eth the scalability problem might not be as dire as for bitcoin where they can’t use this ‘hidden’ model. Meaning the dapp space at least can continue to innovate as it very much has to if they want to continue growing.