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Ethereum Blockchain is Getting Clogged Up… Again

In 2017, Ethereum became the talk of the crypto town. Back during what many have dubbed “tulip mania”, the cryptocurrency became the industry’s hottest trend.

Every initial coin offering (ICO) was based on the platform, there were few competitors in the smart contract realm, and there was much buzz about the dApp (decentralized application) revolution. This resulted in the network becoming clogged with countless transactions.


We’re sure you remember the CryptoKitties debacle of 2017, during which a majority of the network’s processing power was filled with users looking to trade, breed, and purchase digital cats. This was only made worse by the countless ICOs going on at the time.

It seems that Ethereum is encountering capacity problems once again, this time just mere months into the bull run.

Ethereum Clog 2: Electric Boogaloo

According to a recent report from Bloomberg, Ethereum’s network utilization level has reached the 90% level once again, Etherscan’s data shows. This could lead to higher transaction costs, according to a comment made by Ethereum’s wunderkind creator Vitalik Buterin in an interview with Canadian media earlier this month.

Bloomberg writes that this decrease in open network capacity is a result of Tether migrating a portion of USDT’s supply to Ethereum from the Bitcoin-based OMNI network.

According to EthGasStation, the Tether smart contract is responsible for more than 17.5 times the fees paid by CryptoKitties and six times more than IDEX, the leading Ethereum-based decentralized exchange.

This writer has also observed that this clog is a byproduct of spam smart contracts, which try and distribute their token to thousands, if not millions, of wallets across the Ethereum ecosystem. A single unnamed smart contract was responsible for 30% of Ethereum’s gas usage at one time.

Jeff Dorman, the chief investment officer at crypto-friendly asset manager Arca, claims that this uptick in network capacity might be deterring developers from using Ethereum as a blockchain for their applications:

“So the biggest implication today is simply that developers may be incentivized to wait until this [scaling] transition happens before fully committing to build on Ethereum. Tether isn’t helping.”

Ethereum is likely not to find this much of an issue for much longer, however. In an email to Bloomberg, Buterin asserted that Ethereum’s next iteration will fix the current scaling issues, adding that he believes the current scaling standard is “still good to develop apps, but anything substantial should be developed with scalability techniques in mind, so that it can survive higher transaction fees that would come with further growing demand for Ethereum.”

Ethereum is set to soon begin the integration of what the community has dubbed “Serenity”, which will give the blockchain a Proof of Stake consensus mechanism. Buterin explained in a presentation earlier this year that Serenity is “a way to bring technical improvements, like PoS and sharding, together to improve the Virtual Machine, Merkle Trees, the efficiency of the protocol, and a whole bunch of small technical things that you have never heard of.”

Vitalik Buterin Weighs In On Crypto Adoption

Speaking to The Star earlier this month, Buterin mentioned scalability as one of the main issues with adoption. Indeed, if no one can use the chain, adoption cannot be had.

That’s not all. He added that there are also issues with usability, account security, and privacy.

But, to put a cherry on top, Buterin noted that even if you solve all the aforementioned problems, you’re left with one pressing question: how do you turn [the technology] into something people will use? In other words, if the technology is impeccable — easy-to-use, secure, private, fast, decentralized, etc. — how will you bring the public over to use, say, an Ethereum decentralized finance application or a Bitcoin-based Liquid Network altcoin for in-game purchases?

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