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We are more or less aware about which are Bitcoin’s scaling issues. The high fees and slow transaction times are pushing individuals to process payments with other cryptocurrencies. One of the most used for this purpose is Ether. The cryptocurrency that runs in the Ethereum’s platform has lower fees and faster transaction times. But… since a couple of months, Ethereum is having scaling problems that are affecting its performance.

Ethereum Suffers from Scaling Issues

Scaling problems seemed to be something exclusively to Bitcoin. But Ethereum has given signs that it may be experiencing similar issues. When the cryptocurrency market was in a free fall these last days, Ethereum was dealing with a service outage. The network was so congested that some cryptocurrency exchanges had to halt withdrawals. Furthermore, there has been one exchange that advised its users to use another cryptocurrency.

Since December, the Ethereum network is experimenting more than 1 million transactions per day. Sometimes it processes three times more transactions than Bitcoin itself. This congestion in the network has affected exchanges. Bitstamp has informed that they were experiencing delays with ETH withdrawals on January, 17th.

But the situation was solved some hours later, according to the company.

The other exchange that has been affected was Kucoin. Some delays withdrawing Ethereum arrived up to some days. This is why the company has released a statement about this situation. They wrote that the Ethereum network was congested and that NEO could be used instead.

The statement reads as follows:

“We have detected the network congestion of ETH official website; it is more likely the occurrence of delay withdrawal of ETH from part of the users. Hence we would recommend user to proceed withdrawal by transferring ETH to NEO in order to guarantee the availability of one’s funds. Warm Tips: Due to recent major fluctuation of coin price, we advise rational investment and keep in mind the risk ahead.”

What’s Going On?

It is important to remember that ICOs use Ethereum’s platform to run their tokens and ICOs. In addition to it, CryptoKitties, the cat cards game, has been creating a significant amount of the network’s congestion.



Furthermore, the gas prices have been increasing too. That means that transaction fees will be higher. Bittrex reported that due to the high gas prices, new ETH and asset deposit addresses were frozen.

The scaling problem is not just something that Bitcoin is suffering, but other cryptocurrencies too. The Lightning Network could be one of the possible solutions for Bitcoin scalability problem. Fees will decrease dramatically and transaction times will be a tiny fraction of what they are now. Moreover, the lightning network could allow the network to process micropayments, something almost impossible nowadays. In addition to it, Atomic Swaps, would allow immediate cryptocurrency exchanges.


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