High Gas Fees
Many crypto tokens used for trade are part of the Ethereum blockchain. As the Ethereum network gets congested processing transactions (~15 transactions per second), Ethereum Gas (GWEI) price goes up since the amount of work to process transactions increases. Miners who contribute their computational power to validate transactions are paid on these gas fees.
Right now, gas fees can range up to $200, even if it is a simple transaction. This doesn’t necessarily facilitate an active trading environment for those without big bucks.
Think of the high gas fees like the FastPass at Disney World. You pay extra to be able to skip the lines and enjoy the rides first. The cheapskates who didn’t opt for the first-class treatment have to wait in the slow lane while others move ahead.
Let’s use a car analogy.
You stop at the gas station with your Dodge Challenger Hellcat. It’s a gas guzzler, but you only have enough money to fill a quarter of the tank. There are two options here. Either you have to drive slowly to your destination to try to squeeze every last mile per gallon from it, or you need to pony up the cash to put in more fuel and get there faster.
One important thing to know, however, is because the Ethereum miners are putting in the effort of upholding the network, they can ignore transactions with a low gas limit.
Not exactly fair, I know.
Ethereum 2.0 will hopefully solve this problem as it can process up to 100,000 transactions per second, but we are roughly two years away from it being fully implemented.
For now, Crypto Artists will need to either select a time of day that is less likely to be busy, or they will need to increase the price of their artworks to include this fee. Kind of a bummer, but the Crypto Art market will only continue to grow as these issues get ironed out.
This issue is subjective, but it affects Crypto Art in the same way that it affects traditional fine art.
You’ve always heard “Beauty is in the eye of the beholder”, and so is a price tag. Because there is no exchange of tangible goods, some people have a hard time justifying a purchase for the “right” to a digital collectible.
Many purveyors of Crypto Art don’t seem to have this problem. Still, to reach mainstream acceptance, the Crypto Art marketplaces will need to do a good job communicating to the uninitiated what exactly they are buying.
I think we are on the verge of something big here in this space. At the very least, having the ability to verify a piece of physical art on the blockchain recognizing you as the creator would be extremely beneficial to brick-and-mortar art galleries in the future. It would seem that it should accompany every purchase of a tangible good to declare a record of incorruptible ownership.