On-chain data shows that Bitcoin has flipped Ethereum in a single other metric, since the transaction fees paid on the BTC network in the intervening time are higher than those paid on the ETH network.
Bitcoin Total Transaction Fees Is Now Higher Than Ethereum’s
As identified by analyst James Van Straten in a post on X, the Bitcoin transaction fees have over again flipped that of Ethereum. The “transaction fees” here naturally confer with the fees that each one senders on any network need to connect their transfers as a reward for the validator who handles them.
The fees on the blockchain are generally related to the activity it’s serving in the interim. During times of high traffic, the mempool can grow to be congested. Since the validators only have a limited capability to process transactions, transfers can remain stuck waiting for a while.
Investors who don’t have to wait simply slap higher-than-average fees on their transactions, so the network prioritizes them. In especially vigorous periods, many senders can compete against each other in this fashion, thus severely raising the network average.
The total transaction fees of the blockchain naturally shoot up at such times. Nonetheless, periods of low activity generally have the validators receiving low transfer fees, as users have little incentive to go for any high amounts.
Now, here’s a chart that shows how the general transaction fees (in USD) have compared between Bitcoin and Ethereum over the past yr:
The two metrics appear to have crossed each other in recent days | Source: @jvs_btc on X
Ethereum has often had a fame for having higher transaction fees than Bitcoin, and since the above graph shows, that has indeed been the case for the overwhelming majority of the past yr.
It’s type of remarkable that BTC has surpassed ETH in fees on several occasions in the previous few months, though, since the latter network has rarely lost to the unique cryptocurrency on this metric throughout the last five years.
From the chart, it’s evident that the easiest disparity between the two blockchains in favor of Bitcoin came back between the tip of 2023 and early 2024.
This increase inside the BTC transaction fees was partly driven by the Inscriptions, a way of directly inscribing data onto a satoshi (sat), the smallest unit of Bitcoin.
Inscriptions are utilized in many different applications on the blockchain, like non-fungible tokens (NFTs). Transactions related to the Inscriptions are handled by the network like all other, so that they naturally influence the economics related to transaction fees.
The Inscriptions had a large boom earlier, so Bitcoin sharply surpassed Ethereum in fees. Inscriptions have again been gaining traction recently, which is at least partly why essentially the most recent flip between the two has occurred.
It’s unclear whether that is in a position to sustain, though, as even the boom last time ended before too long and the fees dropped back to normal levels.
BTC Price
Bitcoin has been attempting to mount recovery attempts in the previous few days, but each has failed to date, since the cryptocurrency has returned to $62,400.
Looks just like the value of the asset has observed a drawdown recently | Source: BTCUSD on TradingView
Featured image from Pierre Borthiry – Peiobty on Unsplash.com, Glassnode.com, chart from TradingView.com