The Surge in Transaction Costs
Over the past three weeks, the transaction costs for bitcoin (BTC) and ethereum (ETH) have experienced a sharp increase. Bitcoin's transaction fees have soared to a peak of $15 per transfer, while ethereum's fees have also jumped significantly. From October 22 to November 12, 2023, the average fee for ethereum transactions has surged by 219%, rising from $2.08 to $6.64 per transaction.
Parallel Trends in Ethereum and Bitcoin
The rising fees for ethereum transactions mirror the uptrend observed in bitcoin's transaction fees. Both cryptocurrencies have seen a surge in expenses associated with the gas required for transferring the digital assets. Currently, the average fee for an ether transaction stands at $6.64, with the median fee at 0.0013 ETH, equivalent to $2.70 per transaction.
Differences in Transaction Costs
While ethereum's transfer fees closely align with bitcoin's fees, there are distinct variations when it comes to other operations on the Ethereum blockchain. For instance, conducting operations like engaging with a smart contract can incur higher fees. Exchanging an ETH-based asset on a decentralized exchange (dex) platform can cost between $27.77 and $28.50 per transaction, while non-fungible token (NFT) transactions range from $46.93 to $48.16.
The Cost of Bridging Assets Across Chains
On November 12, the cost of transferring assets across different chains via bridging was estimated to be between $8.93 and $9.17. This indicates that inter-chain transactions can also come with significant costs. From October 22 to November 11, 2023, Ethereum has processed an average of approximately 1,071,448 transactions daily.
Ethereum vs. Bitcoin: Market Cap and Transaction Costs
Despite the rising transaction costs, bitcoin still leads ethereum in terms of market capitalization, daily trading volume, and the fees collected by validators compared to what bitcoin miners earn. Transactions on both blockchains, which are the market leaders, are considerably more expensive than transactions on other layer one (L1) counterparts.
What are your thoughts on the rising cost of transferring ether? Share your opinions in the comments section below.
Frequently Asked Questions
Is it a good retirement strategy to buy gold?
Although buying gold as an investment might not sound appealing at first, when you look at the average annual gold consumption worldwide, it is worth looking into.
The most popular form of investing in gold is through physical bullion bars. You can also invest in gold in other ways. The best thing to do is research all options thoroughly and then make an informed decision based on what you want from your investments.
If you don't want to keep your wealth safe, buying shares in companies that extract gold and mining equipment could be a better choice. If you require cash flow, gold stocks can work well.
ETFs allow you to invest in exchange-traded funds. These funds give you exposure, but not actual gold, by investing in gold-related securities. These ETFs may include stocks that are owned by gold miners or precious metals refining companies as well as commodity trading firms.
What are the benefits to having a gold IRA
You can save money on retirement by putting your money into an Individual Retirement Account. It's not subject to tax until you withdraw it. You have complete control over how much you take out each year. There are many types to choose from when it comes to IRAs. Some are more suitable for students who wish to save money for college. Some are for investors who seek higher returns. Roth IRAs, for example, allow people to contribute after they turn 59 1/2. They also pay taxes on any earnings when they retire. Once they start withdrawing money, however, the earnings aren’t subject to tax again. This account is a good option if you plan to retire early.
Because you can invest money in many asset classes, a gold IRA works similarly to other IRAs. Unlike a regular IRA where you pay taxes on gains, a gold IRA doesn't require you to worry about taxation while you wait to get them. This makes gold IRA accounts a great choice for those who want their money to be invested, not spent.
Another benefit of owning gold through an IRA is that you get to enjoy the convenience of automatic withdrawals. This means that you don't need to worry about making monthly deposits. To make sure you don't miss any payments, you can also set up direct deductions.
Finally, gold is one the most secure investment options available. Its value is stable because it's not tied with any one country. Even in times of economic turmoil gold prices tend to remain stable. As a result, it's often considered a good choice when protecting your savings from inflation.
How much should your IRA include precious metals
When investing in precious metals, the most important thing to know is that they aren't just for wealthy people. You don’t need to have a lot of money to invest. There are many ways that you can make money with gold and silver investments, even if you don't have much money.
You may consider buying physical coins such as bullion bars or rounds. Shares in precious metals-producing companies could be an option. Another option is to make use of the IRA rollover programs offered by your retirement plan provider.
You can still get benefits from precious metals regardless of what choice you make. Even though they aren't stocks, they still offer the possibility of long-term growth.
And unlike traditional investments, they tend to increase in value over time. So, if you decide to sell your investment down the road, you'll likely see more profit than you would with traditional investments.
Can the government take your gold?
Your gold is yours, so the government cannot confiscate it. It is yours because you worked hard for it. It is yours. But, this rule is not universal. You can lose your gold if you have been convicted for fraud against the federal governments. Additionally, your precious metals may be forfeited if you owe the IRS taxes. However, even though your taxes have not been paid, you can still keep your precious metals, even though they are considered the property of United States Government.
Statistics
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
External Links
forbes.com
- Gold IRA: Add Some Sparkle To Your Retirement Nest Egg
- Understanding China's Evergrande Crisis – Forbes Advisor
wsj.com
- Saddam Hussein’s InvasionHelped Uncage a Bear In 1989 – WSJ
- Do you want to keep your IRA gold at home? It's Not Exactly Legal – WSJ
cftc.gov
investopedia.com
How To
Guidelines for Gold Roth IRA
The best way to invest for retirement is by starting early. As soon as you become eligible, which is usually around age 50, start saving and keep it up throughout your career. It is essential to save enough money each year in order to maintain a steady growth rate.
You may also wish to take advantage of tax-free investments such as a SIMPLE IRA, SEP IRA, and traditional 401(k). These savings vehicles permit you to make contributions, but not pay any tax until your earnings are withdrawn. They are a great option for those who do not have access to employer matching money.
Savings should be done consistently and regularly over time. You'll miss out on any potential tax benefits if you're not contributing the maximum amount allowed.
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By: Jamie Redman
Title: The Rising Cost of Transferring Ether and Bitcoin: A Closer Look
Sourced From: news.bitcoin.com/ethereum-transaction-fees-climb-219-in-3-weeks-as-onchain-crypto-transfers-become-pricier/
Published Date: Sun, 12 Nov 2023 21:00:34 +0000
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