Will Transaction Fees on Ethereum Ever Get Lower?

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Published on Aug 23, 2020

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One of the underlying themes of our last podcast session was about the cryptocurrencies that we invest in and how we have structured our portfolios. Ethereum (ETH) is a major part of my crypto portfolio and has been for several years now.

During the talk, @rollandthomas asked “Why Ethereum?” and followed up with “Will they ever fix their gas fee issues?”.

My response is the same that I have given many times over when asked about why I think ETH is a good crypto to invest in: "where are all of these projects being built?” 90% of these DeFi projects, new coins, etc. are all built on Ethereum. Even Chainlink (LINK) is an ERC20.

There are a lot of people who hate on Ethereum because of the scaling issues and incredibly high fees that we’re seeing lately. I also like to ask those people: “Why are the fees so high?”.

The fees are high because of usage. People are using the Ethereum platform at levels that we’ve never seen before. High fees, long tx times, etc. are issues that you only can get if you have a lot of users on your platform. In my mind, users and attention is where the majority of value lies.

Bitcoin is a staple in the crypto space. It’s our granddaddy store of value as I like to call it. We should look to BTC as a reliable way to not only preserve our wealth, but to actually outpace other investment classes over long time frames. When it comes to something like Ethereum, you have to change your mindset. It’s a platform for innovation. Not a platform for concrete value storage.

To me, investing in BTC is about value storage and reliable long-term price appreciation. Investing in ETH is about speculation and innovation. Two very different concepts.

As I mention in this clip: I believe that it’s just a matter of time until Ethereum releases ETH 2.0 and other scaling solutions (perhaps even interim solutions like EIP1559). Ethereum is packed with some of the smartest developers in the world and there is also no lack of funding when it comes to the foundation and the projects surrounding it.

Ethereum is a hub of innovation. While scaling is an issue today, it won’t necessarily be an issue tomorrow. The fact that it is an issue is actually quite bullish in my mind. It means that real people are making real transactions on it. There’s plenty of bot action and arbitrage mixed in there, but at the end of the day, Ethereum is the most used crypto platform in the entire world.

Full Podcast Episode: https://leofinance.io/hive-167922/@khaleelkazi/perspixe

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