HomeCoinsEthereumEthereum Bottleneck Enforces Exchanges to Stop Withdrawals

Ethereum Bottleneck Enforces Exchanges to Stop Withdrawals

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Scaling issues that have been affecting the Ethereum network on a sporadic basis have resurfaced. The Ethereum blockchain was fighting to restore some semblance of normal service while bulls and bears battled it out in the markets. As a result of the congestion, a number of exchanges have halted withdrawals, with one even advising customers to use a different cryptocurrency.

Ethereum Moves to the Back of the Bus

Exchanges are forced to halt withdrawals due to Ethereum network congestion.

The Ethereum network has seen record activity in recent months, peaking at over one million transactions per day. This expansion has come at a cost in the form of sluggish or backlogged transactions, causing fees to skyrocket and ICO participants to miss out on token sales due to a lack of ether. Two exchanges reported ethereum withdrawal issues affecting users on Wednesday, January 17.

The first to respond was Bitstamp, which reported ETH withdrawal delays before updating the situation four hours later and stating that the issue had been resolved. Due to ethereum withdrawal delays that have lasted for days, Kucoin exchange users have been disproportionately impacted.

On Wednesday, the exchange issued the following notice, which included a novel suggestion: users should withdraw in neo rather than ether. Users who needed to use their ETH to interact with the Ethereum ecosystem were unlikely to find this suggestion helpful.

Ethereum Network Congestion Forces Exchanges to Halt Withdrawals

More money, more gas, and more problems

Exchanges are forced to halt withdrawals due to Ethereum network congestion.

Following the announcement, Kucoin published a blog post with a form for users who were still waiting for their ethereum withdrawals to be processed. The exchange had previously stated that ETH withdrawals would be delayed because they were released at four-hour intervals. However, not everyone is convinced by Kucoin’s decision to blame the Ethereum network; some users point out that the exchange’s ETH withdrawal fees are five times higher than on other sites that appear to be processing transactions normally.

Many exchanges have recently experienced similar issues, with Bittrex reporting just a week ago that “due to incredibly high gas prices, we’re preventing new ETH and asset deposit addresses from being created.” Existing deposit addresses will continue to function normally.”

Eth Gas Station currently reports that fast transactions cost 51 gwei ($0.93) to complete. Crypto projects abound on the internet, each claiming that their new blockchain can process a billion transactions per second. The reality is that if these networks, like Ethereum or Bitcoin, were ever stress tested in the wild, they would run into the same issues. Scaling blockchains while maintaining decentralization is more difficult than it appears.

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