For a long time, Bitcoin has been regarded as the leading cryptocurrency, with a current price of just over $46,000 and a market cap value of around $872 billion. However, the coin doesn’t lead the way in every metric. When it comes to translation volume, Ethereum takes a huge lead and handles around five times the daily volume that is handled by Bitcoin.
Ethereum is popular with traders because of its robust ecosystem. The network uses decentralised finance (DeFi) protocols, play-to-earn games on the blockchain and NFTs.
While play-to-earn games and NFTs are certainly appealing to traders, it is Ethereum’s use of decentralised finance that is the biggest driver of transactions. Decentralised finance reduces the need for corporation dependency for oversight, storage, server space and a number of other factors. This works to increase the security and reliability of the network, which improves confidence around the network amongst traders. With no central storage location, it is much harder to hack or disrupt the exchange.
High fees show the current demand for the blockchain network as users are clearly active on Ethereum. Users are also willing to pay over $100 to interact with a network’s decentralised applications. However, these high fees can make it difficult for blockchain networks to scale up. As Ethereum gains more popularity, many investors will become priced out of interacting with the blockchain due to high transaction costs.
Another coin that has a slight edge over Bitcoin is Litecoin. While this coin may not be valued anywhere near the price of Bitcoin, Litecoin processes transactions in a quarter of the time of Bitcoin. This results in more chances of scalability and much lower fees. Litecoin can process 150,000 transactions for just $2,700- the average Bitcoin transaction is $0.03-$0.04.
However, these fees may only be low because the coin generates a very low number of daily transactions compared to its competitors. When transaction volume increases, so will the price of its transaction fees.
Bitcoin generates around $750,000 in fees each day and Ethereum generates around $44,000,000. Bitcoin is not expected to overtake Ethereum’s transaction volume as the coin’s primary use case is to store value whereas Ethereum’s is to act as a platform for other blockchain use cases to be built on.
Ethereum is a blockchain that can settle contract execution and payments online without any central intermediary. Ethereum is also the most popular platform for NFTs, which are bought with its native currency Ether. Bitcoins transaction volume has seen a drop recently and hasn’t managed to surpass its all-time high volume, which was reached back in 2017. Throughout 2021, Bitcoin has processed around 250,000 transactions per day while Ethereum has been processing over 1 million. This difference is mainly due to the use case of each network and it is also important to note that any transactions completed on Bitcoin’s Lighting network are not recorded on the chain.