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Ethereum network sees record activity in January

Photo of: Joseph Stone
by Joseph Stone

In January, activity on the Ethereum blockchain enabled the miners to achieve record sales of $830 million. Expenses alone accounted for $504 million in revenue.

Ether and Bitcoin are often on the same track. January 2021 was a record month for the two major cryptocurrencies. And in such a context, the miners are doing well too.

Several manufacturers in the sector placed significant orders for equipment. The objective is quite simply to reinforce their mining capacity for the BTC. But the Ethereum miners are not to be outdone.

Last month, the miners even set a new record. According to CoinDesk data, in January they had revenues of $830 million. They are taking full advantage of the ETH price and the high level of activity on the public blockchain.

Thus, the site points out, it is necessary to go back to January 2018 to find comparable income levels for miners. However, significant changes are to be noted between these two key periods for Ethereum.

In 2018, fees represented just 9% of the miners’ monthly turnover. By 2021, this share had risen to nearly 40% or $504 million. Why such inflation? The Ether news, of course, but especially the explosion of DeFi.

Prior to May 2020, costs indeed weighed less than 10% of the Ethereum miners’ income. Then, the DeFi protocols experienced a sudden growth. Their adoption caused the number of transactions to soar.

Problem, this volume of operations subjects the network to tensions and especially congestions. The result is a sharp increase in costs. For miners, however, these congestions are a godsend. Thus, since last May, fees have represented an average of 30% of their revenues.

However, since this period, the DeFi has only grown, causing some grinding of teeth. Several popular services of decentralized finance are turning to other blockchains, including Solana.

The cost of transactions on Ethereum constitutes a brake for certain economic models. CoinDesk reports that the costs on the blockchain remain high. On January 11, they reached a record high of 19 dollars. The previous record was in September (10 dollars).

Miners do not intend to miss these opportunities. They are therefore enriching their calculation capacities. The network hashrate now peaks at more than 360,000 gigahashes per second (GH/s), according to Etherscan.