Ethereum near capacity means troubled waters ahead. Ethereum co-founder, Vitalik Buterin, warned last week that the costs associated with using the popular crypto coin may soon be too high for some due to Ethereum being so near its utilization capacity which is as high as 90% meaning prices could soon rise to levels considered unacceptable by those in the corporate field.
There are many crypto coins based on the Ethereum network with the largest being the popular yet controversial coin, Tether. As there is a market cap on Ethereum, all the coins that are based on the network count towards the overall availability of all coins operating within the Ethereum space. As Tether becomes more and more popular, it is not only maxing pushing Ethereum’s capacity to the ceiling, but also leaving little room for other coins on the network.
Over the past year, Tether has gone from a market capitalization of around $2.8 billion to the more recent figure surpassing $4 billion. Almost half of the activity on Binance is said to be Tether trading and upwards of 80% of Tether-related trading has occurred on the popular trading platform, Huobi. Binance and Huobi are two of the world’s largest trading platforms for cryptocurrencies.
While nearing the capacity limits Ethereum has to offer comes with its fair share of potential problems, one crucial issue is that development may soon become severely hampered. Ethereum was designed to allow developers to do things that other coins, like Bitcoin, could not do. The development of software, for example, that automates payments and other transactions is one of Ethereum’s strong points. However, while Tether is pushing the network to its ceiling, costs rise, thus making development prospects less attractive to potential investors and developers.
Incoming Ethereum Capacity Increase?
It would seem that for many, the only logical response to effects of Tether is to wait it out. While it may not currently make sense to invest the time and energy to developing projects based on Ethereum due to the aforementioned reasons, a change to the underlying structure could prove to be a gamechanger. Should Ethereum decide to make changes to its code allowing for an Ethereum capacity increase, the network would indeed become attractive once again.
The question, of course, is how and when a major change could take place. Currently, Ethereum remains in the planning stages of its next big shift. There are many changes planned but the implementation seems a distant reality.
The Current State of Affairs
Even being almost full, Ethereum still offers up plenty that other projects cannot. It is also still cheaper than other major players in the field making it a better option in many cases, despite recent developments. There is a higher level of risk, to be sure, but developers working on methods to scale their projects in the future would surely come out ahead. Although Ethereum is becoming more expensive to use, its cost may level out once the changes to the underlying code take place, making Ethereum a smart choice, still.