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Ethereum Turns into First Profitable Blockchain from Top 10 of Crypto Market

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Wed, 16/11/2022 - 10:46
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Ethereum Turns into First Profitable Blockchain from Top 10 of Crypto Market
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Prior to the Merge update and the continuous reduction of issuance, Ethereum has been the "unprofitable" blockchain, just as any cryptocurrency network on the market. However, the situation has changed.

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The "profitability" of a blockchain is not the same as the profitability of a company in traditional finance. Technically, the subtraction of new issuance from fee burns is what allows us to determine whether the network is profitable or not.

To be precise, Ethereum also remains the only deflationary asset from the top 10 of the cryptocurrency market. The profitability of the blockchain does not benefit its holders or new investors. Deflation, on the other hand, can be considered as a strong speculative growth factor for the cryptocurrency in the future.

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By forcibly decreasing the supply of the asset, third parties or decentralized machines might create a supply shock in which the lack of supply and elevated demand causes the price of an asset to reach extreme values.

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While the rallying Ethereum will bring prosperity to investors and traders, dApps users and developers will have no other choice but to make transactions with elevated fees and possible network congestion. Unfortunately, during high network loads, Ethereum forces users to pay up to $15 per operation on the network.

However, various foundations and projects are constantly working on Ethereum's scalability by offering new mechanisms for processing transactions or alternative Layer 2 networks that take some of the load off the main network, offering higher throughput, lower processing times and insignificant fees.

At press time, Ethereum remains deflationary, but due to the decreasing burning rate, the network's profit is going back to $0.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available.

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