Ethereum Loses to CryptoKitties, Network Remains Slow
ICOs and regular transactions are seeing annoying delays due to the effect of blockchain game CryptoKitties taking up to 20% of transaction volume.
CryptoKitties taking up to 20% of transaction volume.
Ethereum was once seen as the replacement of Bitcoin- but at these rates of network congestion, users are becoming skeptical. CryptoKitties is burning up to 20% of the ETH gas in two smart contracts, and while in the past ICOs have slowed down transactions, for the first time there is a long-term factor.
Until now, EtherDelta was among the biggest gas guzzlers, showing that even one decentralized app with enough users is enough to seriously hamper the range of Ethereum. The news caused a withdrawal from ETH and into BTC, causing the value of ETH to slide down toward $430, around $100 from the recent peaks.
Meanwhile, miners are profiting from the second gas increase in two days.
⛏⛏ WE ARE INCREASING THE RECOMMENDED DEFAULT GAS PRICE FROM 25 TO 40 GWEI IN ORDER TO INCENTIVIZE THE MINERS. AS ALWAYS YOU ARE ABLE TO ADJUST THIS AT YOUR OWN DISCRETION ⛏⛏— CryptoKitties (@CryptoKitties) December 6, 2017
The gas market is an unknown equation, allowing users to increase gas and ensure a transaction such as a sale or breeding happens in time. CryptoKitties warns users of watching out the gas, to avoid critically high prices. A critically high gas price may in fact not speed up a transaction but make it fail completely.
The Gemini market is monitoring ETH transactions. The latest message has completely blocked deposits and withdrawals, to lower the congestion and avoid losses:
"ETH deposits and withdrawals are temporarily unavailable due to extreme congestion on the Ethereum Network. Your full ETH balance is still securely being stored in Gemini's offline storage systems. We will continue to monitor and provide updates as needed."
This move may create problems, as the unprecedented rise of Bitcoin, adding up to $2,500 in a day, attracts speculative investments, making users abandon Ethereum due to its lackluster performance.
But the presence of CryptoKitties also puts a big question mark on the hundreds of ICOs claiming to use the Ethereum network one day for distributed apps. The specifics of cryptographic computation may mean dapps never quite work to the levels of current corporate software and centralized applications.
The ability of the blockchain to create unique kitties is also the same concept behind the ideas that one day, the ETH blockchain may secure real estate transactions, marriage certificates and other contracts that now require centralized approval.