The cumulative transaction fee paid for Ethereum (ETH) miners for 2020 is nearly double the Bitcoin (BTC) fee, to $ 276 million versus $ 146 million.
A chart released by Coinmetrics shows how Ethereum taxes rose sharply in the second half of the year, which fell significantly with the release of the compound incentive token. Ethereum’s cumulative fee in 2020 was equivalent to Bitcoin’s on August 12, and has continued to rise since then.
Source: Mineral scales
This differs markedly from the trends in transaction fees from yesterday, when Bitcoin as a whole dominated any other network by a large margin. In 2019, Bitcoin showed a five-to-one advantage in the same comparison.
Cointelegraph previously reported that Ethereum first started showing higher daily fees in June. With increased activity and average transaction fees, total revenue began to rise. Between August and September, Ethereum started breaking previous records and quickly became unusable by some participants.
This is likely to be the reason for the rise in decentralized finance and crop culture, although stablecoin transfers and some alleged Ponzi schemes also make up an important part of Ethereum’s blockchain space.
The current situation will likely soften a little when DeFi’s euphoria subsides, similar to what happened in the cryptocurrency market as a whole in 2018.
It’s interesting to note that Ethereum’s fee income has briefly exceeded its block rewards on some particularly active days in recent months. Since May, fees have steadily risen to over 10% of total issuance – the minimum has only been reached a few times in the coin’s history.
Source: Mineral scales
This may be particularly beneficial to ETH holders in light of the EIP-1559 proposal, which aims to introduce a fee-discount mechanism. While the specifics of implementation mean that during periods of high activity there may be application wars that directly benefit miners, higher activity can significantly reduce the effective degree of firing.
For Bitcoin, it is important to increase transaction fees to cover an existing issue in the long-term future, as the block rewards will eventually run out. However, over the past two years, the cryptocurrency region has begun to shift from Bitcoin-centered use cases to hoarding coins and DeFi. While Bitcoin usage remains high, losing dominance from other blockchains could be catastrophic in the long run.