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Ethereum Network Surpassed Bitcoin

Ethereum over Bitcoin

June 14, 2020 | 

668 Views | 

JOHN K MWANIKI | 

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Bitcoin is currently the undoubted cryptocurrency king. Most of the financial spectators are yet to picture a point where any other crypto coin tops the currency, whether in transaction costs or value.

Ethereum did the least expected to top the transaction fees of Bitcoin for two consecutive days in the early June financial period. The data from Glassnode indicates that Ethereum traded at costs of $498k against the Bitcoin's $308k. Moreover, the gap keeps increasing.

Putting the Ethereum Transaction fees in perspective

Even though a rare occurrence, the Ethereum transaction fees are now surpassing those of Bitcoin for the first time in the financial year. The first time was in 2019 September, when the transaction costs of Ethereum hit $800,000. The surge, in this case, was as a result of congestion on the network.

The financial commentators are attributing the current increase in transaction fees of Ethereum over Bitcoin to a similar case.

Bitcoin’s network is currently experiencing no delays following the earlier clearance after sustained issues. It has no backlog of pending transactions leading to some of the lowest transactions’ fees in the platform ever. The removal reduced the costs from $6.6 to $1. The changes are different from those of the Ethereum that are experiencing hundreds of thousands of pending transactions.

Another reason for the increase in the transaction costs in the Ethereum network is the increased uptake of stable coins that use the Ethereum network.

Mistakes in Transactions Fees

Even though the cost of the transaction fees between Ethereum and Bitcoin has been rife for some time, there is also the issues of possible mistakes. One such case is when an Ethereum use paid transfer fees of a record $2.6 million. To make it worse, this was a second time of happening.

While some speculators have been quick to claim it as an issue of criminal activities or money laundering, deeper investigations prove otherwise. Given the consistent and fast transactions, it seems machine initiated. When contacted, the Ethereum team acknowledged the possibility of such a mistake and that it can reoccur.

It begs the question, how much do such erroneous transaction fees affect the overall calculations. For one, the errors are not widespread. Such cases have not been massively reported before, and it seems to target particular accounts. That is to say, the transaction costs of Ethereum are fast catching up and surpassing those of Bitcoin.

What Does it Mean to the Future of Both Coins

Transaction fees have been one of the major concerns in the crypto world. To understand how much it goes, it is one of the reasons that led to the inception of Bitcoin cash. Part of the earlier Bitcoin users who were pro reducing transaction costs and speeds ended up siding with Bitcoin Cash.

Even though Bitcoin has been predominant in the crypto world, Ethereum has proven to be a worthy competitor. It has been gaining market share due to the lower costs and low transaction costs. It's transactions costs rising, might be a deal-breaker.

All the traders looking to Ethereum as an alternative to Bitcoin based on the transaction costs must now rethink. Still, there is always the assured fact that the transaction costs of Ether will go down. It's generally a matter of time, without a significant impact on the market.

Bottom Line

One of the main concerns that Bitcoins' antagonists have been citing is the high transaction fees and slow transaction rates. While the high prices have been a reserve of Bitcoin for a long time, Ethereum is fast catching up. The increasing pending transactions and the uptake of the stable coins using the Ethereum network fuel the rising fees.

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