The value settlement efficiency – more settlements for lesser fees – has of late shown steady improvement on the Bitcoin network. From available data, it can be seen that the Bitcoin network, over the last week, either transferred or settled $95,142 of value on average for every $1 charged as fees.
There has been an improvement in settlement efficiency that has been observed since May. During this period, that coincided with a bull cycle, more value has also been moved around on the network. This observation was made by analyst Dylan LeClair using data from Glassnode – an analytics provider. The value is arrived at by dividing the volume of transaction by the fees. The settlement costs amounted to a mere 0.00105% of the total value that was transferred of $451.3 billion.
Bitcoin versus Ethereum
In terms of the daily transaction fees Bitcoin ranks seventh among networks with a seven-day average of $678,000. In comparison, Ethereum processes 98.7% higher fees with $53 million in daily fees.
Ethereum’s settlement efficiency has come down because the network has attracted more value from greater demand due to the rise of DeFi and NFTs over the last year and a half.
Bitinforcharts reports that the average fee for transactions on the Bitcoin network is currently $2.13. On Ethereum, as a comparison, the average is a high $42.58. Cointelegraph reports that the transaction fees on Bitcoin have fallen by over 50% this year. The difference in the transaction fees of the two networks has been widening since the end of July.
Ethereum’s higher network fees can be avoided by using two layer networks. There has been a recent surge in the adoption of two layer networks at a total value of $6.87 billion.