After the ether token soared above $ 1,000 on Jan. 3, the average transaction cost on the network similarly rose to a new record level (ATH) of $ 17.41 some 24 hours later. While the average fee has since retracted, data from Jan 8 shows that the last average fee is $ 9.79. This figure is still well above $ 3.56 on the first day of the new year.
Resurgent ETH fees
Before the new ATH, the previous highest average fee of $ 12.54 from the Ethereum network was recorded on September 1, 2020. At the time, some crypto enthusiasts attributed this increase to the decentralized financial (defi) hype. However, when the defi-mania started to disappear, ETH transaction costs decreased gradually.
However, as recently data shows, the network’s transaction costs, which averaged less than $ 5 for much of the fourth quarter of 2020, have now remained above $ 9 almost every day in January 2021, except for two. This high-cost return on the network comes after more than a month ETHmigration to a proof of stake (POS) consensus mechanism.
Meanwhile, the latest data shows that at current fee levels, it now costs the same or even less to trade on the BTC network then on the ETH network. By way of illustration, in the period in which ETH costs increased to the new ATH, transaction costs on the BTC have remained within the same range. For example, throughout the Q4 period, fees on the BTC network only peaked at $ 13.41 on Oct. 31.
For much of the fourth quarter of 2020, the fees on the Bitcoin network fluctuated between the October 31 high of $ 13.41 and $ 1.44 the lowest average in that period. Likewise on the BCH network, whose cryptocurrency has risen by more than 100% since October 1, fees remain below $ 0.01 per transaction.
Upgrade to solve the problem of high cost
Meanwhile, Kamil Brejcha, founder at Dexfin, offers the possible reason why ETH fees have gone up and how ongoing updates will fix it. Brejcha explains:
“We stand for high ETH fees because the Ethereum network still relies on miners to be block producers. The current update is called the Beacon chain, which allows for Ethereum to be deposited for stakeout nodes. These nodes run on their own blockchain, which is not yet part of the mainnet. “
Dexfin’s founder also details the upgrade process that begins with the Beacon chain. The next Shard chain will follow in 2021 before joining the two in the year 2022 or later. After that, the “transaction speed should improve more, and also lower the gas fee”.
What do you think the cost on it ETH network go up? Tell us your thoughts in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or invitation to an offer to buy or sell, or a recommendation or endorsement of products, services or companies. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.