During the morning today, we witnessed a collapse in the Ethereum (ETH) price from $ 200 to $ 130 and this is perhaps what caused the network congestion.
The bearish movement started at midnight in Europe and peaked around 11:00 a.m. when the Ethereum price dropped from $ 170 to a low of $ 130.
On the Ethereum network, there was a surge in transactions, enough to create network congestion that was already approaching its limit in terms of transactions per second despite updates from the past few months.
Response of exchanges like Binance to Ethereum congestion
Major exchanges have seen an increase in trade and some have suspended withdrawals due to the increase in pending transactions, resulting in an increase in the price of GAS.
Binance CEO Changpeng Zhao quickly posted a tweet today to inform the community of the problem.
– CZ Binance 🔶🔶🔶 (@cz_binance) March 12, 2020
Meanwhile, Coinbase has issued a notification about the delay of transactions on the Ethereum network, while other exchanges like Huobi have canceled withdrawals and asked users to try again later.
At the time of writing, the pending transactions were around 120,000, approximately double the normal, but the price of GAS has returned to normal.
Curiously, the Uncle Rate, one of the most important indicators of the amount of load that the Ethereum blockchain is capable of reliably handling, is It has held steady despite the increase in GAS.
This is due to the important work of the developers who have greatly improved Ethereum clients.
Although this price collapse has put the network to the test, Ethereum 1.0 has once again demonstrated its resilience.
Meanwhile, the release date for Ethereum 2.0 seems to be getting closer with its new consensus algorithm: Proof of Stake.
In fact, Vitalik Buterin declared recently in an interview that phase zero of the Ethereum 2.0 project is almost ready and could be launched during the summer of 2020.