Ethereum Network Congestion Forces Exchanges to Halt Withdrawals
January 18 2018 - 5:57AM
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Ethereum Network Congestion Forces Exchanges to Halt
WithdrawalsScaling problems that have been
sporadically affecting the Ethereum network have resurfaced. While
bulls and bears were battling it out in the markets, the Ethereum
blockchain was fighting to restore some semblance of normal
service. The congestion forced a number of exchanges to halt
withdrawals, with one going so far as to advise customers to use a
different cryptocurrency.Ethereum Enters the Slow
Lane
Over the last couple of months, the Ethereum network has
reported record activity, peaking at over one million transactions
a day. This growth has come at a price in the form of slow or
backlogged transactions, causing fees to reach record highs and ICO
participants to miss out on token sales after failing to push their
ether through in time. On Wednesday January 17, two exchanges
reported ethereum withdrawal issues that were affecting users.
First up was Bitstamp, which noted that there were ETH
withdrawal delays, before updating the situation four hours later
to say the matter had been resolved. Users of Kucoin exchange have
been more significantly affected on account of ethereum
withdrawal delays that have dragged on for days. The exchange
posted the following notice on Wednesday, including a novel
suggestion: that users withdraw in neo instead of ether. This
suggestion is unlikely to have been of much help to users who
needed their ETH to interact with the ethereum ecosystem.
More Gas, More Money, More
Problems
Following the notice, Kucoin followed up with a blog post
containing a form to be filled in by users who were still waiting
for their ethereum withdrawals to be processed. A week prior, the
exchange had explained that ETH withdrawals were subject to delays
as they were being released at four-hour intervals. Not everyone
has been convinced by Kucoin’s decision to lay the blame on the
Ethereum network though, with some users pointing out that the
exchange’s ETH withdrawal fees are five times higher than on other
sites, which seem to be processing transactions just fine.
What is beyond dispute is that numerous exchanges have
encountered similar problems of late, with Bittrex reporting only a
week ago: “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.”
Eth Gas Station currently reports fast transactions as requiring
51 gwei, or around $0.93 to process. The web is awash with
crypto projects promising that their new blockchain can handle a
gazillion transactions a second. The reality, however, is that if
these networks were ever to be stress tested in the wild like
Ethereum or Bitcoin, they would face the exact same same problems.
Scaling blockchains while preserving decentralization is even
harder than it sounds.