For Every $1 In Fees, The Bitcoin Network Settles An Average Of $95K.
The efficiency of Bitcoin’s settlement has increased, allowing more value to be delivered for reduced transaction fees.
The efficiency of the Bitcoin network’s value settlement has progressively improved in recent months, with more being settled for lower costs.
The Bitcoin network has moved or settled an average of $95,142 in value for every $1 in fees during the last week.
Since May this year, as more have been transferred around the network during the bull cycle, the on-chain settlement efficiency has been continuously increasing.
Using data obtained from analytics vendor Glassnode, on-chain analyst Dylan LeClair made the discovery. Divide the average transaction volume by the fees to get the value.
The final settlement costs were only 0.00105 percent of the $451.3 billion total value transferred.
Bitcoin is ranked eighth in the list of networks by daily transaction fees, according to CryptoFees. It ranks below Uniswap, Ethereum, Aave, Binance Smart Chain, SushiSwap, and Compound with a seven-day average of roughly $678,000.
According to the fee tracking website, Ethereum is already collecting $53 million in daily fees, which is 98.7% more than the Bitcoin network. Bitcoin and Ethereum should not be compared in terms of value settlement and costs because they are two separate entities: the former is a store of value asset, while the latter is a smart contract and decentralized application network.
When the average transaction volume of Ethereum is divided by the fees, the value transacted per dollar in fees is just $139.
The Ethereum network’s settlement efficiency has decreased as the network’s value has grown and higher demand has been placed on it, particularly with the emergence of DeFi and NFTs in the last 18 months.
The average transaction cost on the Bitcoin network is currently approximately $2.13, according to Bitinfocharts. In comparison, the average charge on the Ethereum network is $42.58. Bitcoin transaction fees have dropped by more than 50% this year, according to Cointelegraph.
Since the end of July, the difference in average transaction fees between the two networks has widened.
Layer two networks, which have seen a rise in acceptance over the last few months, with a near all-time high total value locked of $6.87 billion, according to L2beat, can be used to sidestep Ethereum’s network cost woes.