Ethereum Fee Burns Clocks $100 Million, Here’s Why The Burn Is Important

News BTC

The Ethereum network has now continuously burned base fees for a week straight and in that time frame, the amount of ETH burned has hit $100 million. With over 32,000 ETH burned in the space of seven days. The fee burn rate fluctuates given the network traffic, but the burn continues regardless. Depending on network traffic going forward, the burn rate is predicted to hit 4 ETH per minute very soon.

Related Reading | Ethereum Set To Explode According To Market Dominance, Crypto Analyst

The rate at which the ETH is burned currently sits at around 3.38 ETH per minute. This puts the current burn rate at over $10,000 burned per minute. The burn shows that the EIP-1559 upgrade is working as intended, which in the long run will hopefully make the nature of ETH deflationary. But that is not happening just yet. The burning of the base fee is still in its early stages, although it is working smoothly.

How To Get Free Crypto  
5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!

It will take a while for the rate at which new ETH is burned out of circulation to be high enough that ETH’s supply becomes deflationary. But that remains to be the end game here. And this is why the burn is so important to the network.

Related Reading | Here’s What Happens To All Of The Crypto Assets The IRS Seizes

The fact that Ethereum does not have a capped supply like bitcoin means that an unlimited number of ETH can be put into circulation. This is one feature that ETH has in common with fiat, the unlimited supply. It is one of the main reasons why the move to ETH 2.0 is so important to the network.

Get 110 USDT Futures Bonus for FREE!

Putting Less ETH Into Circulation

The ETH burn is basically taking away a huge chunk of ETH that miners would have been given for mining blocks and “burning” the coins. EIP-1559 introduced a base fee mechanism that is determined by the wallet where a transaction is generated and this base fee would be burned. Then the owner of the wallet where the transaction is generated can then add a ‘tip’ to a transaction if they want their transaction to be included in a block faster, basically leading to faster confirmation times.

Related Reading | Why A Shocking Altcoin Season Could Be On The Horizon

In just a week, 32,000 ETH has been burned. This 32,000 ETH would have formerly been added directly into circulation as it is given as a reward to miners. But now, this amount that would have added to supply has been completely taken out of the equation.

Coinbase Banner  

For now, it may seem like miners are getting the short end of the stick with this, but ETH potentially becoming deflationary is a win for the market as a whole. Less supply would make ETH coins more valuable, which, in turn, would drive up the price of the asset.

Ethereum Price Going Forward

ETH price has had an interesting run these past three weeks. The asset price which had broken below $2,000 last month experienced a price surge that sent the price surging past $3,000 this month. Ending a two-month-long streak of a painful downtrend.

ETH price dips as the week draws to a close | Source: ETHUSD on TradingView.com

Following the launch of the EIP-1559 saw the Ethereal network become even more popular amongst investors. And as the popularity of the network grew, so did the popularity of its native token, ETH. With more investors coming into the market, the value of the asset has skyrocketed. Although now there has been a bump in the road as a dip in the price has sent ETH barreling back down below $3,100.

Related Reading | Bulls Take Over Market As Ethereum Price Surpasses $3,000, Why Rally May Continue

Short-term, recovery is imminent, as is the case following most dips. But the scale of the recovery will be hard to tell. A 3% price drop in the last 24 hours has seen ETH lose $200 off its price in the same time period. But overall, the market remains bullish and it looks like the dip is only a small obstacle that will be scaled in no time.

FreeBitcoin Banner  
Featured image from Coingape, chart from TradingView.com

Go to Source
Author: Best Owie


Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

This site uses Akismet to reduce spam. Learn how your comment data is processed.