Amid a broader market recovery, ethereum gas fees have risen once again as a result of increased demand for block space. bitcoin users experienced a similar experience, with average transaction fees skyrocketing to levels not seen since May.
While the latest fee frenzy comes in the wake of growing optimism in the market, it also highlighted the need for scalability solutions such as layer 2 and rollups.
bitcoin and ethereum fees rise
Data collected by Dune Analytics sample ethereum gas fees briefly hit 270 Gwei late on November 9, reaching a level not seen since June 2022. This resulted in trading costs soaring to between $60 and $100 for about hours.
The latest spike comes as the largest altcoin soared to a seven-month high after Blackrock confirmed plans for a spot ethereum exchange-traded fund (ETF).
The gas bull market is back pic.twitter.com/qRaEacu7V9
—Nansen (@nansen_ai) November 9, 2023
Meanwhile, average bitcoin fees skyrocketed to $15.86 on the same day. bitcoin-transactionfees.html#1y” data-wpel-link=”external” target=”_blank”>According for Bitinfocharts, the figure was a six-month high. Several users took to X (formerly Twitter) to report that fees were around $10 for high priority transactions. While this is relatively low, bitcoin‘s average transaction cost has been below $4 since May, according to that data.
Increased exchange activity and the execution of financial transactions are further complicated by the increase in ordinal registrations. Despite serving as a last resort for block space, these registrations add to the growing order book and intensifying fee market.
Meanwhile, bitcoin transaction fees continued to hover around the recently set high, and the cost of Ether transfers has dropped to almost 30 Gwei at the time of writing. However, growing interest and demand sparked demands for cheaper alternatives.
bitcoin layer 2
bitcoin Layer 2 is designed to improve the scalability of the bitcoin network by processing transactions outside of the main blockchain protocols. These are built on top of the base layer to address and provide additional functionality to bitcoin by increasing programmability, privacy or unlocking new utilities.
Lightning Network, Rootstock, Stacks, Liquid Network and rollups (both validity and sovereign) are some of the main bitcoin layer 2 solutions. But Stacks co-creator Muneeb Ali believes bitcoin‘s layer 2 has a long way to go compared to layer 1 like Solana.
While discussing the need for bitcoin layer 2, Ali tweeted,
“The reality of today’s market is that L1 alternatives (ethereum, Solana, etc.) are better developed and more mature than bitcoin‘s L2. They provide users and developers with a better experience and tools. “It’s okay to admit that market reality and then work to improve the state of things in the bitcoin L2 ecosystem.”
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