After the Ethereum token soared to the $1,000 mark on January 3, about 24 hours later, the average transaction fee on the network also soared to an all-time high (ATH) of $17.41. Although the average cost has declined since then, data on January 8 shows that the latest average cost is $9.79. This figure is still much higher than the $3.56 on the first day of the new year.
ZTE ETH fees
Before the new ATH, the previous highest average cost of the Ethereum network was $12.54, which was recorded on September 1, 2020. At the time, some cryptocurrency enthusiasts attributed this surge to decentralized finance (defi) hype. However, as the upsurge of resistance began to dissipate, ETH transaction fees gradually declined.
However, as shown by recent data, the network’s transaction fees averaged less than US$5 for most of the fourth quarter of 2020, and within two days of January 2021, its transaction fees are currently maintained at 9 dollars or more. One month after ETH migrated to the Proof of Stake (POS) consensus mechanism.
At the same time, the latest data shows that at the current fee level, the cost of transactions on the BTC network is now the same or lower than that on the ETH network. For example, during the Ethereum fee soaring to the new ATH, the transaction fee on BTC has been kept within the same range. For example, during the entire fourth quarter, the cost of the BTC network only peaked at $13.41 on October 31.
For most of the fourth quarter of 2020, the cost of the Bitcoin network fluctuated between the October 31 high of $13.41 and the lowest average of the period of $1.44. Similarly, on the BCH network, its cryptocurrency has risen by more than 100% since October 1, and the fee per transaction is still less than $0.01.
Upgrade to solve the problem of high fees
At the same time, Dexfin founder Kamil Brejcha provided possible reasons for the soaring ETH fee and how the ongoing update will solve this problem. Brejcha explained:
“We are facing high ETH fees because the Ethereum network still relies on mining work as a bulk producer. The current update is called the beacon chain, which allows depositing Ethereum for staking nodes. These nodes are in their own blockchain And the blockchain is not yet part of the mainnet.”
The founder of Dexfin also detailed the upgrade process starting from the beacon chain. In 2021, the next fragmentation chain will appear before the two merge in 2022 or later. Since then, “transaction speed should be further increased, and gasoline costs will also be reduced.”
What do you think is the reason for the increase in ETH network fees? Tell us what you think in the comments section below.
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