Home Coins Ethereum (ETH) Ethereum cumulative fees in 2020 eclipsed Bitcoin’s for the first time

Ethereum cumulative fees in 2020 eclipsed Bitcoin’s for the first time

Cumulative transaction fees paid to Ethereum (ETH) miners for 2020 are now close to double those of Bitcoin (BTC), clocking in at $276 million versus $146 million.

A chart released by Coinmetrics highlights how Ethereum fees went on a steep ascent in the latter part of the year, coinciding quite closely with the release of Compound’s token incentive. Cumulative 2020 fees on Ethereum equalized with Bitcoin’s on Aug. 12, continuing a break-neck ascent since.

Source: Coinmetrics

This marks a distinct change from trends in transaction fees from past years, where Bitcoin generally dominated over any other network by a wide margin. In 2019, Bitcoin came out with a five-to-one advantage in the same comparison.

Cointelegraph previously reported that Ethereum first began posting higher daily fee revenue in June. As activity increased and the average transaction fee with it, total revenue began skyrocketing. Between August and September, Ethereum began breaking previous records and quickly became unusable for some participants.

The culprit is most likely the boom of decentralized finance and yield farming, though stablecoin transfers and some alleged Ponzi schemes also make up a significant portion of block space usage on Ethereum.

The current state of affairs is likely to wind down somewhat as DeFi euphoria settles, similarly to what happened in the crypto market at large in 2018.

It’s interesting to note that Ethereum fee revenue briefly exceeded the block rewards for a few particularly high-activity days in the past few months. Overall, fees have crept up to steadily over more than 10% of total issuance since May — a threshold achieved only a few times in the coin’s history.

Source: Coinmetrics

This may be particularly valuable for ETH holders in light of the EIP-1559 proposal, which seeks to introduce a fee burn mechanism. While the specifics of the implementation imply that in periods of high activity there may still be bidding wars that directly benefit miners, high activity could lower the effective issuance rate to a significant extent.

For Bitcoin, raising transaction fees to cover existing issuance is crucial for its long-term future, since block rewards will eventually expire. However, the cryptocurrency space in the past two years has begun trending away from Bitcoin-centric use cases to stablecoins and DeFi. While Bitcoin usage remains high, losing dominance to other blockchains may prove catastrophic for its long-term prospects.



Source link

- Advertisement -
Mr Bitcointe
Mr Bitcointehttps://www.bitcointe.com/
“Fact You Need To Know About Cryptocurrency - The first Bitcoin purchase was for pizza.” ― Mohsin Jameel
474FansLike
76FollowersFollow
4,567FollowersFollow
5,261FollowersFollow
1,548FollowersFollow
2,230SubscribersSubscribe
USD - United States Dollar
EUR
1.18
GBP
1.30
CHF
1.10
NOK
0.11
JPY
0.01
CAD
0.75
AUD
0.71

Most Popular

Atención humana contra la inflación | by Nevin Freeman | Reserve Currency | Oct, 2020

Por: Sin nombre, Director de Reserve LATAM, y Nevin Freeman, CEOPrimero, somos humanos y, luego, un producto financiero.La hiperinflación genera crisis humanitarias como...

Loan refinancer and BitLicensee SoFi is clear to launch a national bank in the US

In an announcement on Wednesday, the Office of the Comptroller of the Currency (OCC) granted SoFi a conditional license to operate as a national...
bitcoin
Bitcoin (BTC) $ 13,277.44
ethereum
Ethereum (ETH) $ 391.07
ripple
XRP (XRP) $ 0.245907
tether
Tether (USDT) $ 0.999621
bitcoin-cash
Bitcoin Cash (BCH) $ 268.62
bitcoin-cash-sv
Bitcoin SV (BSV) $ 169.69
litecoin
Litecoin (LTC) $ 56.29
eos
EOS (EOS) $ 2.67
binancecoin
Binance Coin (BNB) $ 30.25
okb
OKB (OKB) $ 4.73
tezos
Tezos (XTZ) $ 2.02
leo-token
LEO Token (LEO) $ 1.27
cardano
Cardano (ADA) $ 0.099703
monero
Monero (XMR) $ 126.45
stellar
Stellar (XLM) $ 0.078521
chainlink
Chainlink (LINK) $ 11.67
huobi-token
Huobi Token (HT) $ 4.26
tron
TRON (TRX) $ 0.027129
usd-coin
USD Coin (USDC) $ 0.999131
dash
Dash (DASH) $ 68.25
neo
NEO (NEO) $ 15.94
iota
IOTA (MIOTA) $ 0.270307
nem
NEM (XEM) $ 0.098755
zcash
Zcash (ZEC) $ 57.41
maker
Maker (MKR) $ 546.09
paxos-standard
Paxos Standard (PAX) $ 1.00
ethereum-classic
Ethereum Classic (ETC) $ 5.32
vechain
VeChain (VET) $ 0.010743
true-usd
TrueUSD (TUSD) $ 0.999737
ftx-token
FTX Token (FTT) $ 4.12
kucoin-shares
KuCoin Shares (KCS) $ 0.847051
waves
Waves (WAVES) $ 3.05