Ethereum Gas
Ethereum purposefully throttles the mainnet network to limit the size of the underlying database.
If it grows bigger than you can sync and store on a consumer-grade laptop the network has failed one of its primary mandates.
This means a limited number of transactions are processed every 13 seconds. Roughly ~200 right now.
Wow that’s a pretty big limitation for a worldwide computer network, no? How do we deal with this?
Gas. When you send a transaction on Ethereum there is an open auction to get your transaction into the next block. You bid with your ETH tokens. Generally speaking the highest bidder wins. The more important your transaction is the more you pay for it. The longer you are willing to wait the less it costs.
When gas is high that just means there is a lot of demand. When gas is low there is less demand.
There used to be a small amount of demand and for many years gas was cheap.
Now the network is in high demand and extremely popular so the fees are higher.
It’s a simple mechanism. It’s just a throttle built around basic capitalism. Pay more to jump the line. An effective system loved by the rich and disliked by the poor since the beginning of time.
I don’t like paying gas or standing in line. No one does. Ever been to Disney and a family flashes a pass and cuts in front of everyone? This is that.
There are a ton of different technologies that are being developed to work within these limitations to expand the overall throughput of the network to handle a much larger amount of traffic. They take time to develop. This year there has been a lot of progress.
One of the best ways to visualize the network:
