Ethereum’s blockchain network is currently ‘burning’ (removing from circulation) over US$450,000 worth of the digital currency every hour under new upgrades to the network that went live last Thursday.
According to the website Etherchain, the network is currently operating at a burn rate of around 2.41 Ethereum per minute, or 144.6 an hour, which at current prices is equal to around US$452,000.
The burning of Ethereum is part of a new transaction fee structure introduced by a fundamental upgrade to the blockchain, which removes a certain amount of Ethereum from circulation every time a transaction is processed on the network.
The changes were introduced in an effort to make transaction fees on the network more consistent while also making it feasible to use Ethereum for small or frequent transactions without having to pay large or unreliable amounts of fees.
The declining supply of Ethereum as a result of the burning process was seen by many analysts as a potential upward pressure on market prices of the digital currency provided demand remained at similar levels or increased.
As of mid-afternoon trading in London on Monday, this hypothesis appeared to have been correct, with Ethereum’s price having increased by around 14% since last Thursday to US$3,133.