Typically, blockchains that can process a larger number of transactions per second have lower fees.
Today there are dozens of popular blockchain projects that charge different transaction fees. A simple rule of thumb is that the higher the throughput of the network, the lower the transaction fee.
For example, the standard fee for a Ripple transaction is 0.00001 XRP today and peaked above 0.40 XRP for a very short period in 2017. Given that the price of XRP is under $ 0.25, the fee is negligible.
With Ethereum, transaction fees are higher and can increase during network congestion. This happened in 2017, 2018, and mid-2020 during the DeFi madness. That August, fees hit an all-time high – and a month later the record was broken again. Some people were paid $ 99 in fees, leading to speculation that some protocols were looking for alternative blockchains. On September 1, the ETH miners made a profit of $ 500,000 in one hour. The demand for transactions has become a huge problem for this blockchain, but there is hope that a long-awaited upgrade to Ethereum 2.0 will deliver a better fee system. Ethereum co-founder Vitalik Buterin has raised concerns that high fees could encourage selfish mining practices.
Bitcoin, the largest cryptocurrency by market capitalization, has also seen a significant increase in transaction fees this year. They were below $ 1 in July, surged above $ 6 in August, and broke against $ 10 in late October.
In addition to Bitcoin and Ethereum, other blockchains – including Litecoin, Bitcoin Cash, Cardano, and Ethereum Classic – have much lower fees averaging less than a cent. Tron has even lower fees, similar to Ripple.
Elsewhere, ILCoin also has infinitesimal transaction fees and relies on a Bitcoin-inspired PoW protocol. Each block on its blockchain can process millions of transactions, as opposed to the 2,000 transactions contained in a typical BTC block. This allows ILCoin to maintain imperceptible fees – and the company says that equates to 0.0124 ILC for every 10 million million transferred. In contrast to Ripple, a more centralized payment network, ILCoin is decentralized and based on the RIFT protocol.