Ethereum News
Sky-reaching Transaction Fees Make Ethereum More Lucrative than Bitcoin for Miners
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The revenue figure that miners have derived from the Ethereum network in recent months has been consistently higher than that from hashing Bitcoin over the same period. Early this month, the revenue by those mining the Ether token spiked to an all-time high – 95,000 ETH in income, as per data compiled by analytics firm Glassnode. This marked a continuation of a trend in which Ethereum has ‘outperformed’ Bitcoin in rewarding miners.
The scale of near-crazy transaction fees that was observed on the Ethereum blockchain a little over a week ago was attributed to the increased activity around BAYC creator Yuga Labs. The blockchain technology firm minted NFTs – Otherdeeds – for its Otherside metaverse project, which stretched the scales for gas fees on Ethereum.
Not so enticing on Bitcoin’s plate
Bitcoin’s productivity had fallen by a significant 31% in the one year ending April 2021, which added to the number of consecutive months in which Ethereum has reigned over Bitcoin in miners’ revenue. Across April, Bitcoin miners saw $1.16 billion in revenue, compared to Ethereum’s $1.39 billion, data from The Block Crypto showed. Even though Ethereum saw a 17% monthly decrease in year-over-year miner revenue, it still outperformed Bitcoin.
In previous months Ethereum has recorded higher miner rewards, beating Bitcoin by $0.26 billion, $0.19 billion, and $0.13 billion in January, February, and March, respectively. April’s $0.224 billion in more revenue than Bitcoin was the second-highest of any month this year.
Transaction activity keeps Ethereum miner rewards up
Ethereum’s utility has pushed the network to reward users more lucratively than Bitcoin, and the biggest edge the former holds over the latter is the contribution its transaction fees has on the totals of miner rewards.
Ethereum is able to command higher total transaction fees than Bitcoin owing to the network’s application in decentralized finance, including use in play to earn gaming and NFTs. For instance, in April, most of the Bitcoin revenue was dominantly from block subsidies ($1.14 billion) and just a meager $12.98 million from transaction fees. Ethereum netted $82.88 million in transaction fees.
On the other hand, this is a two-edged sword, one side of it serrated.
While the miners gain rewards in high values, the user has to contend with a slow-performing network, in addition to astonishing gas fees. These sky-reaching transaction fees can become even more of a detriment for users where bloated fees are paid only for transactions to fail.
In determining mining revenue, the price of an asset is multiplied by the total of mining rewards plus the transaction fees per block. Therefore, the relative prices of ETH and BTC also play a factor in miner rewards.
Bitcoin and Ether market performance
Crypto assets in the market have continued with the dismal performance that has started in the early days of the month.
Bitcoin dropped below $28,100 during Thursday’s trading session and is hovering around its lowest price level this year. At the time of writing, BTC was exchanging hands at $28,030 – down 11.15% on the day and 29.25% over the last seven day. This is the first appearance of Bitcoin around the $28k mark in over two years.
Ethereum is equally abysmal, now having lost support above $2,000 for the first time since last July. Ether sunk to a ten-month low of $1,748 earlier today but has since managed to bounce. It was last spotted trading at $1,918. Its 20.82% dip on the day bring the 7-day slump to 34.44%.
To learn more about Ethereum visit our Investing in Ethereum guide.
