Why Ethereum Briefly Overtook Bitcoin in Daily Transaction Fees

Ethereum transaction fees are back on the rise and gaining parity with bitcoin transaction fees.

As seen in data charts provided by blockchain analytics firm CoinMetrics, ethereum surpassed bitcoin in daily transaction fees on Sept. 21.

While ethereum has since been maintaining a close parity with bitcoin's daily transaction fees, bitcoin currently beats out ethereum at roughly $350,000 in fees per day.

Choe added that part of the reason for a surge in ethereum transaction fees has been the recent increase in trading activity surrounding dollar-pegged stablecoin Tether.

"USDT-ETH is generating so many transactions that it recently accounted for over 25% of all Ethereum transactions on September 8th, and has consistently accounted for more than 10% of all Ethereum transactions since mid-August."

"The shift is potentially beneficial to the Ethereum ecosystem since it shall decrease fiction for the most-used stablecoin in the world integrating into the open finance space. However, with USDT clogging the Ethereum network, it means other developers have to encounter a spike of cost on computation power in Ethereum."

In order to prevent network congestion, miners on the ethereum network have recently responded to the surge in transaction activity by increasing ethereum's "Gas limit."

Stepping back, the cost to send a transaction on the ethereum network is called gas and paid in fractions of ETH called gwei.

Ethereum blocks are now effectively 25 percent larger - allowing for larger transaction processing loads.

"It's official! Ethereum miners have unilaterally increased the gas limit and made it even harder to sync a full node," tweeted self-proclaimed bitcoin maximalist Conner Brown.