Cryptocurrency network congestion has become a very real problem over the past few years. Not only have we seen Bitcoin suffer from such issues, but the Ethereum network is prone to major delays as well. It is evident this creates a lot of problems for cryptocurrency users looking to transfer value from one platform to another. As a result, the Kucoin team now advises users to switch to NEO for moving value across platforms. It’s an interesting decision, to say the least.
Kucoin Grows Concerned Over Ethereum Network Congestion
The past six months have not been easy for most top cryptocurrencies. With an influx of thousands of new enthusiasts every single week, it is only normal that the existing blockchains are taxed beyond their capabilities as well. We have seen plenty of issues affecting Bitcoin transactions, and the Ethereum network has suffered from congestion as well. It seems both of these blockchains direly need to scale, but it takes time to develop proper solutions in this regard.
These issues do not just affect people looking to spend cryptocurrency for purchases. Nor are they limited to people who invest Bitcoin or Ethereum in altcoins or initial coin offerings. Perhaps the biggest problem is that this congestion prevents users from properly using either Bitcoin or Ethereum to move money between trading platforms. Since they are the two markets with the highest liquidity, it is unsurprising that they are also the most popular solutions in this regard.
Solving these issues will not be easy. There is very little that exchanges and trading platforms can do to alleviate these concerns, especially because they do not control the Bitcoin or Ethereum networks. As a result, their users are getting fed up with delays and often blame the trading service providers for delays. It is unfortunate how things are unfolding, but we will see even more of these issues moving forward, by the look of things.
As a result of these ongoing issues, the Kucoin exchange decided to issue a major announcement regarding Ethereum withdrawals. It touches upon the blockchain’s congested state and how it affects Kucoin deposits and withdrawals. The company recommends that its users switch to a different currency altogether as a way to transfer value across exchanges. Surprisingly, that new currency is not Litecoin, but rather NEO. On paper, NEO and Ethereum are not all that different from one another, and NEO is supported by a fair few trading platforms already.
We’ve 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’d recommend users to proceed withdrawal by transferring ETH to NEO. pic.twitter.com/Fij9AuPJB0
— KUCOIN (@kucoincom) January 17, 2018
It is the first time we’ve seen a popular cryptocurrency exchange advise users against relying on Ethereum for withdrawals and deposits. This sets a very interesting precedent, although it is expected that this is a one-time event. The Ethereum developers have been working on major network improvements for some time now. Once those upgrades come to the network, Ethereum congestion may quickly become a thing of the past. At the same time, one never knows how things will unfold.
Some people are not too happy about Kucoin telling its users to rely on NEO for faster withdrawals. It is evident that exchanges should not tell others how to move their money to and from trading platforms. At the same time, one has to commend the exchange for addressing these issues and offering a somewhat reliable solution. Whether or not this will have any impact on the NEO ecosystem remains to be determined. For now, it seems few people have actively made the switch, which is not that surprising.