Since the inception of cryptocurrencies, Bitcoin has been at the top of the pile, and all the other coins have been following the leading crypto’s trail.
Bitcoin is widely regarded as the gold standard for the cryptocurrency industry and for many people, Bitcoin is synonymous with cryptocurrency.
The altcoin market rises and falls in relation to Bitcoin’s performance which acts as the baseline for crypto markets.
Ethereum surpassing Bitcoin in USD transactions
Ethereum is the second biggest cryptocurrency by market share, and several players in the industry make use of this digital asset.
This past week, Ethereum made waves after performing better than Bitcoin in one vital area of the industry.
The digital asset topped the list of total daily USD based transaction fees. Over the last weekend, Ethereum miners collected higher mining rewards in comparison to their Bitcoin mining peers.
The last month has seen Bitcoin’s price falter as the cryptocurrency fails to gather the necessary support at its current market price.
During this time that Bitcoin prices have fallen, Ethereum is trading in the green. Ethereum recently enjoyed its best 24 hours versus Bitcoin, and this shows that there is a lot of positivity around the network.
More crypto users engaging with Ethereum means higher fees
Growing numbers around Ethereum reveal that the network has gained more users over the last few months.
For any cryptocurrency network, there is limited throughput in order to preserve the decentralization of the system.
If a network is processing too many transactions, there is a chance that some of the individuals on the network could cheat the blockchain.
When there is an increase in the traffic on Bitcoin and Ethereum networks, there are higher transaction fees due to the limitations placed on the network’s capacity.
This high traffic is what has been experienced by the Ethereum network over the last month and has led to the high fees on the blockchain.
The implications of high traffic for Ethereum
The value of fees paid on a network is directly correlated to the performance of the blockchain in the crypto sector.
If people are willing to pay a lot for the right to use a blockchain, it shows that there is demand for the blockchain. It also means that people are likely getting some rewards on the blockchain.
Growing fees could have a bearing on the price of the blockchain’s native token. The total fees reflect the amount of activity that is being experienced in the network, and it gives the token’s miners extra incentive to continue mining the digital asset.
This may not have a direct implication on the native token of the network, but eventually, it will come together with other factors to push the token’s price upwards.
The Ethereum network needs the high fees and traffic on the network to translate to traders holding onto the native token for long periods.
If traders hold on to a cryptocurrency, it shows that the token has a value that people see as worth holding onto.
The native token will see its value against Bitcoin fall if users do not keep it as was the case when Ether lost 85% against Bitcoin in 2017.