The Ethereum ecosystem has seen tremendous growth and innovation over the past two years. For all the technological advancements, however, there have been some drawbacks as well. It appears nearly every single wallet has the same problem: their default gas price is too high. This default setting causes users to spend more money transacting than necessary.
Ethereum Wallets and Default Gas Settings
As most people are well aware, gas is used on the Ethereum network to facilitate the broadcasting and confirmation of transactions on the network. Increasing the gas price allows users to have their transfers confirmed quicker. Every gas amount included in a network block serves as an extra incentive for miners to pick up a transaction. It’s similar to how the transaction fee works for Bitcoin and most other cryptocurrencies.
Every Ethereum wallet in existence will automatically create a default gas price for transactions. Wallet developers wish to ensure that users’ transactions will be confirmed as quickly as possible. No one wants Ethereum users to overspend fees for transactions, but when dealing with a cryptocurrency ICO, inflating the gas price is an absolute must. It appears that most Ethereum wallets’ default gas setting causes a lot of friction.
In short, the default gas price is too high. It does not appear most major wallets allow this default gas price to scale based on how the network situation is evolving. We have seen gas prices come down quite a bit whenever there is no major ICO taking place. Unfortunately, most wallets still keep their gas price well above the minimum threshold. Of course, some people feel this is less of an issue, considering they will see their transfers confirmed quicker than had the gas price been lower.
Looking at the bigger picture, however, the high default gas price is a big problem. Close to 75% of all network transactions spend four times as much gwei as they should, despite there being no real advantage in doing so. This leads some people to believe that using Ethereum is far more expensive than it really is. Miners will continue to reap the benefits from this scenario, so they will not complain. More earnings for them is always beneficial to them, even if it hurts regular users quite a bit.
The bigger question is why this default gas price is completely out of sync with what is happening on the network itself. It is possible that some wallets use algorithms to determine the default gas price based on the average gas amount used in the most recent blocks. If that were the case, the number would still be far too high. After all, these blocks include a lot of transactions that pay too high a price already, which will not bring the average down by all that much. It is disconcerting to see so many different wallets suffering from this problem.
Something will need to change very soon. Although most users may not even care about overspending on transaction fees, it can become a very big problem for Ethereum if it is not addressed properly. Finding a solution may not be as straightforward as some people would like it to be. We can only hope the developers come up with a workable solution to counter those high gas prices.