As Ethereum miners earn record profits, will ETH prices rise further?

According to Decrypt on July 31, ETH's price has risen more than 180% since its March 2020 low, but data from the blockchain suggest that the world's second most popular digital asset may have further to go.

As Ethereum miners earn record profits, will ETH prices rise further?

According to data released by Glassnode, a blockchain analytics company, many metrics on the Ethereum network have surpassed their late 2017 highs, including the amount of gas used in transactions and the amount of work done to support the blockchain to prove the benefits of mining.

The data show that the current market base for Ethereum is markedly different from the one two years ago, when ethereum hit an all-time high of $1,400, reinforcing the belief that ethereum's owners are likely to earn more in the future.

Transaction fees on Ethereum are reported to be the highest ever. However, the amount of work currently required to ensure the Ethereum blockchain proves that the difficulty of mining and the hash rate have fallen by nearly 25% since they peaked in the summer of 2018, according to Glassnode.

The hashing rate of the Ethereum network. Source: Glassnode

The lower hash rate means that ethereum miners can handle more transactions with the same hardware. Although the number of newly dug ETH has remained stable since February 2019, the overall hashing rate has decreased, meaning that more gas will be paid to miners in ethereum transactions.

As a result, the miners generated fees of more than 16 per cent on some days, and at one point more than 19 per cent, from broadcasting to the Ethereum network. By contrast, when ETH prices peaked in early January 2018, miners never received more than 15 per cent of their fees.


Ethereum's miners' earnings. Source: Glassnode

It's worth noting that ethereum's infrastructure providers are profiting from actual activity on the blockchain, especially compared to previous periods of lost activity and optimistic prices.

Another indicator of Ethereum growth that far outstrips the all-time high is the use of total GAS. Usage of total Gas on the Ethereum network has nearly doubled compared to January 2018, as Ethereum trading is no longer simply a personal wallet or transfer between exchanges, but more complex and expensive operations through the use of smart contracts.

Gas usage of ethereum network. Source: Glassnode

As the market shifts from speculation on decentralized applications to the use of functional applications for borrowing and earning returns, as reflected in the significant increase in gas usage, will the price of ETH follow?

Much of ethereum's work will change with the launch of Ethereum 2.0, a long-awaited network upgrade. These include a shift in the way the network can handle more transactions per second and a shift in the way new blocks are generated in the network. Until the upgrade to Ethereum 2.0 is complete, there seems to be a lot more to make ETH owners optimistic.

Text link:https://www.8btc.com/article/629491

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