Transaction fees can have a significant impact on the overall health of a cryptocurrency ecosystem. Ethereum notes a strong rise in overall fees over the past three months, which is somewhat worrisome. Moreover, Bitcoin has been cheaper to use compared to Ether during several intervals in the past quarter. Statistics are provided by Blockchair.
Litecoin Remains the Cheapest Blockchain
Comparing the different transaction fees across these top three ecosystems yields interesting results. Not too many people will be surprised to learn that Litecoin is a very cheap blockchain to use. Moving value across the LTC network is often cheaper than Bitcoin, and nearly always cheaper than using Ethereum. It is an impressive feat, given the public’s perception of the silver to Bitcoin’s gold.
On average, a Litecoin transaction fee consists of $0.001 or slightly less. As is to be expected, there are outliers, with fees potentially doubling or more at certain intervals. Even at twice the normal fee, Litecoin remains a much cheaper blockchain to transfer value
Judging by the three-month chart, it does appear that LTC transaction fees have risen slightly more often than not. That in itself is something worth keeping an eye on.
Bitcoin has Become Cheaper At Times
One often heard criticism is how Bitcoin is too expensive to use on most occasions. Overall, there is some truth to those criticisms, although Bitcoin’s transaction fees have come down between May 2020 and early July 2020.
In this period, it was not uncommon to pay a fee of $1.1 or less. At its lowest point on June 14th, Bitcoin users could transact on the network for just $0.20655. That is still more expensive compared to using Litecoin, but a noticeable improvement nonetheless.
What is remarkable is how the fees are rising again. This trend has begun in early July, and shows no real signs of improvement. Paying as much as $2.35 per transaction may become the norm once again. Bitcoin users will not be too pleased with that turn of events,
Higher fees may eventually drive more people to alternative currencies or layer-two scaling solutions.
What is Going on With Ethereum?
Compared to both Litecoin and Bitcoin, Ethereum has a very different ecosystem altogether. Providing access to smart contracts, dApps, and decentralized finance attracts a lot of users, but also affects transaction fees.
According to the chart by Blockchair, Ethereum’s transaction fees have increased significantly Growing demand for exposure to DeFi solution will certainly be a contributing factor in this regard.
Up until late May 2020, an Ethereum transaction fee of $0.325 was somewhat unusual to deal with. Ever since, it has become the average up until early July of this year. From that point forward, the fees have only kept increasing.
Today, paying $0.666 for an Ethereum transaction is not abnormal. Judging by the transaction fee trend, this figure is likely to keep increasing over the coming weeks.