High Ethereum fee revenue may improve its SoV credentials
According to Coinmarketcap, a total of 5093 digital assets currently exist in the industry, at press time. This is a significant number since the larger crypto-community is involved in the investment and development of only a handful of these crypto-projects at the time. And while questions about the larger sustenance of the crypto-market remain, Bitcoin and Ethereum are expected by many to survive the long haul.
Bitcoin holds a massive advantage over Ethereum in terms of market cap and popularity, but Ethereum’s diverse development and consistent updates keep it relevant in the market as well.
A recent State of the Crypto report observed that Bitcoin continued to remain the most used network in terms of transfer count in 2019. However, towards the end of September 2019, Ethereum’s median transaction fee surpassed Bitcoin for a brief period of time.
Ethereum’s blockchain has also been favored more for the circulation of Tether supply as usdt_erc20 overtook usdt_omni towards the end of 2019.
The increasing median fee caught the eye of Ryan Sean Adams, Founder of Mythos Capital, who asserted that the transaction fee revenue could have different implications for BTC and ETH. He stated,
“For BTC, fees are future security budget, there’s a lot riding on them. For ETH, the higher the fees the lower the issuance & the more scarce ETH becomes. High fee revenue may be the best path to long-term SoV.”
An argument in favor of Ethereum’s case as Store-of-Value has picked up traction recently as many speculate that after its transition to Proof-of-Stake, combined with Constantinople’s EIP 1234, there is a good chance that ETH’s valuation would surge as users lock up more coins for staking. Further, many expect projects planning to launch their DApps to pay their fees via ETH.
Additionally, the development of Serenity will allow the platform to become more scalable and ETH would improve its money-like properties which include durability, uniformity, portability, etc.
Back in 2019, James Spediacci had also highlighted Ethereum’s SoV credentials and stated,
“Once proof of stake is implemented on Ethereum and brings the inflation rate of ETH near zero at 0.5%, ETH will have a limited supply, giving it all six characteristics of money: durability, portability, acceptability, divisibility, uniformity, and limited supply.“
“By obtaining these characteristics, ETH will have the framework and potential to be considered a medium of exchange (MoE), unit of account (UoA), and a store of value (SoV).“