Ethereum miners are increasingly profiting from transaction fees as they keep growing – along with concerns over the high prices.
Miners on the Ethereum blockchain have set a new record by earning half a million dollars in transaction fees in just one hour, according to crypto analytics platform Glassnode.
#Ethereum miners earned over $500,000 USD in transaction fees in the past hour.
— glassnode (@glassnode) September 1, 2020
That is a new record high for a single hour (anomalous transaction fees earlier this year excluded).
Chart: https://t.co/RZz5yMV44U pic.twitter.com/fmyD5zZSYs
While record revenues are an undoubtedly welcome achievement for miners, the Ethereum community has been raising concerns over steep—and constantly growing—transaction fees for some time now. As Decrypt reported, both Ethereum supporters and rivals are acknowledging that fees are getting out of hand—but there is no clear solution.
“Prediction: Ethereum gas fees ruin Defi for normal users (until Ethereum 2.0 in 1-2 years),” tweeted ShapeShift CEO Erik Voorhees. (DeFi is a term for decentralized finance.) He added that this might push developers to start building on other compatible platforms.
Prediction: Ethereum gas fees ruin Defi for normal users (until Ethereum 2.0 in 1-2 years). To meet demand, developers start rapidly porting Defi components over to Cosmos via Ethermint which just launched and is apparently compatible with Solidity already 😬 https://t.co/i37egVoyWl
— Erik Voorhees (@ErikVoorhees) August 24, 2020
Ethereum co-founder Vitalik Buterin acknowledged the issue with fees on Twitter today, but reiterated his stance that Ethereum users should be using layer two technology to get around the issue.
“To those replying with “gas fees are too high”, my answer to that is “well then more people should be accepting payments directly through zksync/loopring/OMG”. Seriously, scaling to 2500+ TPS for simple-payments applications is here, we just need to… use it,” he said.
To those replying with "gas fees are too high", my answer to that is "well then more people should be accepting payments directly through zksync/loopring/OMG". Seriously, scaling to 2500+ TPS for simple-payments applications is here, we just need to… use it. https://t.co/J2KMJyLKv6
— vitalik.eth (@VitalikButerin) September 1, 2020
In mid-July, Decrypt reported that Ethereum’s network used a new daily all-time high of 74 billion Gas (units in which transaction fees are measured). Since then, that figure has already grown to 79 billion Gas by August 31—and it keeps rising, according to Etherscan.
While there are limits to the total value of transaction fees that can be included in one block in the blockchain, Ethereum miners keep raising them. In June, they pushed up the limit from 10 million to 12.5 million, where it currently stands.
In the month of August, Ethereum miners generated $115.3 million in fees. Bitcoin miners generated only $39.2 million in the same time period – about three times less than Ethereum miners.
— Larry Cermak (@lawmaster) September 1, 2020
But expanding the capacity of the Ethereum blockchain has an unwelcome side effect. It makes it bloat at a much faster rate. Glassnode noted that Ethereum’s blockchain is now growing at a rate of 260 megabytes per day.
“That is a 2x increase since the beginning of the year. And 40% higher than Bitcoin’s current blokchain (sic) growth rate – which is at an ATH (186MB per day),” the platform tweeted yesterday.
#Ethereum transaction fees in perspective: Miners earned a total of $113M from fees in August.
— glassnode (@glassnode) September 1, 2020
In April this number was at only $3M – that's a 38x increase!
And a 1.8x increase from the previous ATH in Jan 2018.
In comparison: #BTC miners earned $39M in August, almost 3x less. pic.twitter.com/JVQGsSalrU
Ethereum might be the place where everything is happening—but is it sustainable?
The market is starting to shift, and the action is heating..
The crypto market is changing fast. New projects are bringing better..
Circle Internet Group has achieved a significant milestone in the financial..
Floppypepe ($FPPE) is your ticket to the moon. Escape the ordinary and reach for lunar gains with this AI meme token. Secure your spot now before it's too late.
Join Now