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The hidden cost of adoption: Understanding the impact of gas costs on Shiba Inu (Shib)
The cryptocurrency has traveled a long way since its creation in 2017, revolutionizing the way we think of money and financial transactions. One of the most popular cryptocurrencies is Shiba Inu (SHIB), a decentralized token and focused on the community that has gained important follow-up in the world. However, growth is increased by demand, which can lead to higher gas costs which not only eat in investor wallets, but also affect the overall health of the cryptocurrency ecosystem.
In this article, we will immerse ourselves on the impact of gas costs on Shiba Inu and what it means for its users, its developers and the wider community of cryptocurrency.
What are gas costs?
Gas fees, abbreviated for transaction costs, are an essential element in the cryptocurrency network. They are essentially the cost associated with treatment transactions between nodes (computers) in the blockchain network. As more users and transactions go through each node, it generates more work, which is then rewarded in the form of new parts.
The climb of Shiba Inu
Shiba Inu is one of the most popular cryptocurrencies, with a market capitalization exceeding $ 50 billion. With its native shib token, users can send, receive and spend tokens on various platforms, including decentralized financing protocols (DEFI), game platforms and social media services.
The impact of gas costs on Shiba Inu
As the number of transactions increases, the gas costs too. According to a Chainalysis report, Shiba Inu transaction costs have increased exponentially in the past year. For example:
- On January 1, 2022, SCH transaction costs reached an average of $ 0.005 per transaction.
- On February 1, 2022, the costs increased to an average of $ 0.008 per transaction.
- As of March 31, 2023, SCH transaction costs reached an average of $ 0.012 per transaction.
Why are gas costs raised?
Several factors contribute to high gas costs on Shiba Inu:
- Congestion of the network : With more users and transactions going through each node, the network becomes more and more congested, leading to higher treatment deadlines and an increase in costs.
- Problems of evolution of the blockchain : The inherent limits of blockchain in the management of a large number of transactions per second limit its ability to evolve effectively, which causes high gas costs.
- Lack of infrastructure : Many users still use older or not supported portfolios, which can lead to slower transaction processing times and higher costs.
The consequences of high gas costs
High gas fees have serious consequences on the Shiba Inu ecosystem:
- Reduction of adoption : The increase in gas fees can dissuade new users from joining the ecosystem, leading to a reduction in adoption and a drop in market capitalization.
- Economic structure : higher transaction costs can cause economic tension for users who already have trouble with high costs, in particular those in developing countries or regions with limited access to digital payment systems.
- Network instability : High gas fees can cause network congestion, resulting in increased latency and a reduction in performance, which can affect the overall user experience.
Attenuated gas costs
To mitigate the impact of high gas costs on Shiba Inu:
- Developing new infrastructure : Investing in advanced blockchain technologies and infrastructure can help improve scalability and reduce costs.
- Implementation of rupture solutions : rupture techniques allow the division of the blockchain into smaller segments, reducing the congestion of the network and the transaction times.
- Improve the support of the portfolio : Encourage portfolio developers to support more users and features can help to mitigate the burden of wallets, which leads to faster and lower costs.