Understanding Ethereum transaction rates: 20% is normal?
As the second largest cryptocurrency of market capitalization after Bitcoin, Ethereum has become a popular choice for people who want to create microtransations and deal with suppliers. However, one question that surprised many users is why the average rate for the transaction in Ethereum is about 20%. In this article, we go deeper into the reasons for these rates and examine what is considered normal.
What are transaction rates?
Transaction rates are a small amount of cryptocurrency, calculated by the transaction processing network. They serve as an incentive for programmers to build and maintain the Ethereum network, which allows us to perform intelligent contracts and decentralized applications (DAPP). The rate is usually paid in the form of ether (ETH), native cryptocurrency of the Ethereum network.
Why are transaction rates high?
The main reasons why the transaction rates in Ethereum are high are:
- Network overload : With over 200,000 active accounts, the Ethereum network may be crowded, which leads to increased processing and higher rates.
2.
- Gas prices : Gas is a transaction unit on the Ethereum network. As gas prices increase, as well as transaction rates.
20% is a normal rate?
In today’s competitive cryptocurrency market, 20% may seem relatively high compared to other platforms. However, it is necessary to consider the following factors:
1.
- Network capacity : The Ethereum network has a limited capacity, which can lead to higher rates when the network is fully used.
3.
To say, 20% are considered relatively high by many users. For comparison:
- In Bitcoin Cash (BCH), the popular Altcoin, the average transaction rate is about 1-2 cents.
- In Cardano (ADA), another blockchain platform, the average transaction rate is much lower, about 0.01-0.0.05 eth.
Application
Although 20% may seem relatively high in Ethereum, it is necessary to consider the ability of network and market competition when deciding whether this rate is justified for their needs. As cryptocurrency evolutions of the landscape, we can expect a decrease in rates when the network becomes more used.
For now, if you are a frequent micro-transder or regularly use DAPPS Ethereum, it may be worth paying 20%. However, if you are a light user with rare transactions, you can find 1-2 cents for a more reasonable transaction. Finally, it is crucial to consider the costs and benefits of using Ethereum before drawing conclusions.
References:
- Coindesk.com: “Ethereum transaction rates will increase as the highest rates of $ 5,000 in some areas”
- Cointelegraph.com: “Why does the rate for the Ethereum transaction reach the record?”
- Ethereum.org: “Understanding Ethereum transaction rates”
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