According to a recent report from Delphi Digital, the amount of Gas used on the Ethereum blockchain is at an all-time high, and the number will continue to grow. Gas is used as a way to charge for the Ethereum blockchain, and the total amount of gas used online has been rising since the beginning of 2020.



Gas usage and possible maximum fuel   -  sources: Delphi Digital

The total amount of ETH gas used is different from the transaction cost indicator in the BTC blockchain. On the Ethereum network, transaction and intelligent contract fees are determined by the amount and price of gas required, which allows fees to change dynamically and separated from Ethereum's price to a certain extent.

The amount of gas used in a given transaction depends on the computational complexity of the transaction. Gas prices, on the other hand, are chosen by the person executing the transaction and priced in Ethereum. The price is ultimately set by the miners, who accept or reject the deal based on the gas price.

USDT and DEX leads the market

While gas usage reached an all-time high, the number of transactions on the Ethereum blockchain is still far below  1,349,890, the transactions reached on January 4, 2018.

This means that most of the increase in total gas usage comes from the use of smart contracts, which are more complex and therefore require more gas.

According to ETH Gas Station, the majority of gas usage comes from USDT, of which used about $1.61 million of Ethereum Gas. This is more likely followed by DeFi and some scams and Ponzi schemes. USDT also leads in average gas prices used, at 35.5 Gwei.

After USDT, DEX appears to be in the lead in popularity. According to DappRadar, IDEX is the most used Dapp in terms of the number of transactions alone, while IDEX and Kyber are among the top three on the Ethereum network.

A recent survey also shows that DeFi's highest awareness and usage comes from DEX.





Higher transaction fees and gas restrictions

The increase in the use of the Ethereum network led to an increase in average transaction costs as miners preferred to deal with higher gas prices.

Total gas usage is limited by miners, which limit the size of the Ethereum blockchain by determining how many transactions are in a block.

Ethereum is likely to face network congestion soon due to several factors, including the current increase in the use of gas on the network and related block gas restrictions. If gas usage rises to the upper limit, users will have to compete with higher gas prices to execute trades and smart contracts.

Also, a sudden collapse in Ethereum prices can lead to higher fees and network congestion. According to a report by The Block, on March 12th, the average fee costs increased from $0.16 to $1.04.

When the usage is close to the limit set by miners, we may need to add the block gas limit. The most recent increase was in September 2019, when the block gas limit increased by 25%, from about 8 million to about 10 million.

However, the change will further increase the size of Ethereum's blockchain, which is already nearly 140 GB. Therefore, seeking a more efficient method of investment has become a new way out for many people.

Take BitOffer as an example, the biggest feature of BitOffer option is that no matter whether it is a bull market or a bear market, it has the opportunity to obtain up to a thousand times of excess income without any margin or handling fee. Bitoffer options provide sections of 2 minutes, 5 minutes, 15 minutes, and 1 hour. Besides, it is worth mentioning that the ETH option spot index is composed of the equivalent weights of 7 exchanges.

More info: https://www.bitoffer.com/en

Since bitcoin production was reduced in May, the bull market did not appear as expected. After repeated failures of reaching $10,000, the balance of bitcoin exchanges has hit new lows in succession. Data on June 7 shows that the bitcoin exchanges on the entire network are 2310466.6, which is 300,000 bitcoins less than the high point at the beginning of the year. This shows that in the unclear market, more and more holders choose to trade for profit, rather than cash out.

Compared with the continuous decrease of Bitcoin spot circulation, the trading volume of Bitcoin options has shown explosive growth. According to statistics, the position of bitcoin options exceeded $1 billion for the first time on May 8, and this figure exceeded $1.5 billion at the end of May. BitOffer, one of the world's largest digital currency derivatives trading platform indicate that since BitOffer launched the industry's first Bitcoin option contract last October, its option trading users has exceeded 130,000, and the average daily trading volume has achieved 500% growth.

According to Lucian, the chief analyst at BitOffer, traders focus on digital currency options investment while the current halving has not started and there is no clear direction in the market, is because those options have the advantages of high leverage, no risk of exploding positions and low fees.

At present, the main participants in options trading are miners, institutional hedging traders, and individual traders. For miners and institutional traders, options as a hedging and hedging tool that have a lower risk cost than futures. For individual traders, options are more like a futures contract that will not be liquidated. The leverage of Option can be up to a thousand times, and not the margin trading system. Thus, there is no risk of liquidation and the trading cost is also lower than the futures margin, which is an excellent tool that throws out a minnow to catch a whale.

BitOffer is the first one to launch the digital currency options, and currently also the largest exchange for digital currency derivatives. The reason why it can stand out from many competitors, Lucian said this is because BitOffer's bitcoin options following the American option trading rules, with 0 handling fees and 0 margins, but also can be closed at any time during the holding period, the transaction is flexible and free. In the current market, the options products of OKEX and Deribit are European options. Which in addition to paying the option fee, also needs to pay an additional transaction fee, and the option cannot be closed without expiration. It is not suitable for short-term flexible transactions.

Lucian said that the current market lacks largely continuous fluctuations, and the market comes and goes quickly. The flexibility of trading is particularly important. For example, on June 2, Bitcoin fell by nearly 800 points in 5 minutes. If buy a put option on  BitOffer, closing at the low position immediately could make $800. However, for European options on other exchanges, even if they are in the right direction and at a low point, the option cannot close the position until the time is up, and we can only watch the market rebound back and the profits are running out.

Lucian believes that under the halving of the market, investors will prefer to choose the suitable investment tools to fill the vacancies in the transaction, which will grow the trading volume of options. BitOffer, as the industry's first exchange to launch bitcoin options, currently also lists Ethereum options, which can be going-long and going-short. The trading cycle is flexible from 2 minutes to 7 days with 0 margin and 0 handling fees. Also, available to close the position, helping investors to pave the golden track before the bull market.

Despite the recent rebound in Bitcoin, and the macroeconomic situation is also promoting the development of Bitcoin, this cryptocurrency was criticized by Goldman Sachs analysts on Wednesday.

In a customer conference call on May 27, entitled "Implications of Current Policies for Inflation, Gold and Bitcoin," two Goldman Sachs executives and a Harvard professor discussed bitcoin in detail.






Goldman Sachs' comments on Bitcoin also have a positive side

A well-known market commentator said that when discussing Bitcoin, Goldman secretly pushed up this asset. He explained that the fact that they discussed bitcoin meant that they were actively following it: "My opinion is that any publicity could be considered as the good news. With bitcoin on their radar, they have to respond. The content of the response Is secondary. "

A commentator on cryptocurrency trends added that the content of this meeting confirmed the demand for Bitcoin: "The facts including BTC indicate that they have seen a lot of interest from customers."

At the same time, Goldman Sachs is a general brand with countless teams. This call is a conference to discuss their private banking and private wealth management departments, not a research report sent by their macroeconomic research (macro team) or global investment research team. So it was more of a perfunctory report requested by a private financial client.

Having said that, the pessimistic prospects reported by Goldman Sachs analysts on the conference call are not enough to prove that "all Goldman Sachs holds a pessimistic view of Bitcoin."

Ethan Vera, the chief financial officer of the crypto asset mining startup Luxor, point that Goldman Sachs is a large institution with many different departments. The wealth management department's views on Bitcoin and cryptocurrencies do not necessarily reflect the opinion of the company.

Ethan Vera's Twitter




The former Goldman Sachs investment banker added that the rest of the multinational company has a vested interest in cryptocurrencies.

The bank's investment branch is part of Circle's $50 million financings, Circle is a financial services startup that currently focuses on cryptocurrencies. Circle launched USD Coin and other well-known products, which received the funds.

Goldman Sachs also considered launching bitcoin services for customers. Bloomberg reported in late 2018 that, according to a person familiar with the matter, the company is considering a cryptocurrency custodian solution.

The point here is that parts of aspects of Goldman's business may be delving into Bitcoin and cryptocurrencies, while others are quietly turning back. Form Evan points of view, the main strategic investment group is completely independent of the wealth management department. He thinks that Goldman Sachs has gone further in Bitcoin than most other banks.

Recently, the interaction between miners and the Ethereum network has reached a record high, but the increase in fuel usage may cause problems for the cryptocurrency network.

According to a recent report from Delphi Digital, the total amount of gas used on the Ethereum blockchain has reached the highest level in history, and it seems that this number will continue to grow. Fuel is a means of charging the Ethereum blockchain. Since the beginning of 2020, the total amount of fuel used on the network has been rising.





The total amount of fuel used is different from the transaction cost indicator in the Bitcoin blockchain. On the Ethereum network, transaction and smart contract fees are determined by the required fuel and fuel prices. This mechanism allows fees to change dynamically and to some extent separate from the price of Ethereum.


The amount of fuel used in a given transaction depends on the computational complexity of the transaction. On the other hand, the price of fuel is selected by the person who executes the transaction and is priced in Ether. The price is ultimately determined by the Ethereum miners, who accept or reject the transaction based on the fuel price.



USDT and decentralized exchanges dominate.

Although the fuel usage reached the highest level in history, the number of transactions on the Ethereum blockchain is far lower than the highest historical record of 1,349,890 transactions reached on January 4, 2018.

This means that the increase in total fuel usage comes from the use of more smart contracts. Because smart contracts are more complex, more fuel is needed.

According to data from ETH Gas Station, the usage is mainly from USDT, and the Ethereum fuel cost alone cost $1.61 million. It was followed by DeFi applications and some scams and Ponzi schemes. USDT also leads the average fuel price used, at 35.5 Gwei.

Following the USDT stablecoin, the decentralized exchange (DEX) seems to be in a leading position in terms of popularity. According to DappRadar data, IDEX is the most used dapp in terms of the number of transactions alone, and IDEX and Kyber are both in the top three on the Ethereum network.

A recent survey also showed that DeFi's highest awareness and utilization rate come from decentralized exchanges.

Higher transaction fees and fuel restrictions

The increase in Ethereum network usage has led to an increase in average transaction fees because miners prefer to handle transactions with higher fuel prices. According to data from glass node, at the time of writing, the average transaction fee has increased five-fold from $ 0.08 in January 2020 to $ 0.41. This also accounts for about 10% of miners' income.

The total fuel usage is limited by the block fuel limit set by the miners, which limits the size of the Ethereum blockchain by determining how many transactions are in a block. The amount of fuel used in each block has been steadily increasing, from 69% in January to the most recent 95%, and is also close to the current upper limit.

Considering the current increase in fuel usage on the network and related block fuel restrictions, due to various factors, Ethereum may face network congestion in the near future. If fuel usage rises to the upper limit, users will have to compete with higher fuel prices to execute transactions and smart contracts.

In addition, a sudden plunge in the price of Ethereum may lead to higher fees and network congestion. As seen during the plunge on March 12, according to a report by The Block, the average fee cost increased from $ 0.16 to $ 1.04.

In this highly volatile situation, traders may find network congestion very troublesome, because the leverage positions of DeFi platforms and centralized exchanges may be liquidated before they take action.

When the usage is close to the limit set by the miners, it may be necessary to increase the block fuel limit. The most recent increase was in September 2019. The block fuel limit was increased by 25%, from about 8 million to about 10 million.

However, this change will further increase the size of Ethereum's blockchain, which has reached nearly 140 GB. Therefore, there seems to be no simple solution, and Ethereum faces considerable challenges in terms of scalability.

The Ethereum developer community is about to launch Ethereum 2.0, which will become an important milestone this blockchain network has been expecting for many years. Ethereum 2.0 will mark the beginning of the transformation of Ethereum from a proof-of-work (PoW) consensus algorithm that miners rely on to a proof-of-stake (PoS) algorithm. In the PoS system, there is no need for miners to mine blocks and verify transactions. Instead, the user will verify the data on the blockchain.

 
According to Afri Schoedon, coordinator of the Ethereum 2.0 testnet, there is currently no specific date for the release of Ethereum 2.0. Schoedon said, "The final specification has not been implemented in any client, and we have not yet launched a coordinated testnet."

 
Ethereum co-founder Vitalik Buterin also clarified the development pace of Ethereum 2.0, but if client-side developers expect Ethereum 2.0 to be completed in the third quarter of 2020, it will be completed at this point in time. In other words, all progress depends on the progress of the client developer. However, three key indicators show that investors and users highly hope to achieve the integration of Ethereum 2.0 by the end of the year. These indicators include the growth in the number of Ethereum addresses, the increased demand for Ethereum (ETH) in the market, and the surge in user activity on the chain.

Although most people expect prices to fall after halving, the overall trend of prices is still gradually rising and may move towards the $10,000 mark. The halving is largely described by Bitcoin supporters as the supply/demand dilemma, but it is worth thinking that the halving of Bitcoin will not cause Bitcoin to become scarce in the supply of resources, but only reduces the entry of Bitcoin There is the number of supply pools. Many investors and supporters of traditional financial systems have begun to realize that this deflationary model makes Bitcoin stand out from the competition.

Talking about the impact of the recently ended halving on the public, GE Capital ’s former senior vice president Alan Silbert pointed out that from the practical aspect of Bitcoin as a truly independent financial commodity See, the halving event is to remind everyone at the supply of Bitcoin should follow the mathematically bound release schedule:

"This is one of the key principles that endow Bitcoin with value. This is even more verified in the context of unlimited trillions of dollars printed by the government." The halving event is a good reminder for investors The difference between traditional fiat currency markets.