Ethereum in 2021 and Beyond
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Ethereum continues to remain one of the most in-demand platforms in the world as users flock to its offerings. A recent report by Ethereum developer Josh Stark detailing Ethereum’s performance in 2021 shows that the demand for Ethereum has outweighed that for its competitors in the blockchain space based on a number of factors, including total transaction fees, total fees and revenue, and transactional volume.
The figures displayed above indicate that Ethereum has outpaced its major blockchain competitors such as Bitcoin, Solana, and Cardano in terms of pure transactional fees and has almost reached half of Visa’s total accumulated transaction fees observed in 2021. In this instance we can see transaction fees as a measurement of user demand, where users are more willing to utilize a specific blockchain or payment system such as Ethereum over other offerings, regardless of the cost per transaction. A major factor behind Ethereum’s transaction fee figures is the explosion of interest in NFTs throughout 2021.
Ethereum total transaction volume has surpassed $11.6 trillion in 2021, more than double of that observed in Bitcoin’s transacted volumes and even edging out Visa’s $10.4 trillion dollar transactional volume for the year.
Ethereum’s many successes have not come without its share of criticisms. Gas fees, which are the Ethereum blockchain’s fee structure, have increased to extreme levels as overall network demand has caused congestion when processing the overwhelming amount of transactions on the blockchain. According to BitInfoCharts, gas fees (red) have continued to remain at elevated levels compared to Bitcoin transaction fees (blue) which saw a brief spike in April 2021 but has remained at much lower levels afterwards.
It will be important to continue to monitor Ethereum’s performance in 2022 as leading competitors such as Solana and Cardano continue to develop their ecosystem and infrastructure in a bid to eat away at Ethereum’s market share.