Ethereum’s network of decentralized applications and smart contracts has been facing criticism due to its high rate of failed transactions, resulting in significant losses for users. According to Fernando Nikolić, the Marketing and Communications Director at Blockstream, Ethereum users have lost over $100,000 in just the top 10 failed transactions on the network.
Nikolić shared this disheartening data on his platform X (formerly Twitter), where he described the failed Ethereum transactions as “hot garbage.” The most significant failed transaction alone caused a loss of more than $38,000 in gas fees for a single user, with the second-highest failed transaction resulting in a loss of over $17,000 in gas fees. Other failed transactions in the top 10 list also showed users losing thousands in gas fees.
It’s essential to understand that Ethereum’s structure requires users to pay gas fees for transactions, regardless of success or failure. Unfortunately, this means that if a transaction fails on Ethereum’s network, the gas fees paid are lost permanently.
These considerable losses shed light on the issue of transaction failures, especially during periods of increased network activity. For example, in May, Ethereum experienced a surge in traffic due to the popularity of the meme coin PEPE, which led to increased congestion and a correlation with a dramatic rise in gas fees. Insufficient gas to process transactions can result in widespread failures.
Nikolić’s criticism of Ethereum is not isolated, as other Bitcoin advocates have recently condemned the platform as well. Bit Paine, another Bitcoin proponent, referred to Ethereum as a scam just last week, citing concerns about unregistered securities in the form of tokens. Despite their differing perspectives, both critics bring attention to Ethereum’s struggles with failed transactions and questions regarding token registration.
Despite these challenges, Ethereum remains the second-largest blockchain network, valued at over $226 billion. However, the losses experienced by users due to the network’s limitations should not be ignored by the Ethereum community. As activity continues to increase, similar to the meme coin mania in May, failed transactions will likely become a recurring issue. It is crucial for Ethereum’s developers and researchers to prioritize solutions to prevent avoidable losses caused by transaction failures.
