The High ETH Transaction Fees are impacting Market Price of The Mineable Ethereum Token.

A higher mining cost equals a higher potential token price for BSOV, the mineable and deflationary cryptocurrency (ERC20 + ERC918)

The ETH Gas Price is the Transaction Fee of the Ethereum blockchain, and lately (July/August, 2020) the fee has been consistently growing higher, making an ETH-transaction average at half a dollar, and ERC20-transactions at around one dollar. The high transaction fees can make a simple trade/swap at Uniswap cost about $3.50, and deploying a new smart-contract or Liquidity Pool can cost up to $100. Several people don’t think these fees makes a sustainable transactional ecosystem, but some cryptocurrencies may benefit from it.

The Mining Cost/Market Price Precedence made by Bitcoin (BTC)

Question: “What Determines the Price of 1 Bitcoin?”

Investopedia.com answers this question in the above link to their article, among the other answers: There is one extremely important answer.

Answer: “The cost of producing a bitcoin through the mining process.“

The Bitcoin Miners do not want to sell their mined BTC with a loss, so their reluctance to sell at a low price drives the BTC-price upwards. As long as BTC’s Mining Difficulty rises, the intrinsic value of BTC will rise, as well as the cost of attacking it.

ETH-Fees as another cost factor of BSOV’s Mining Process

BSOV is a Mineable & Deflationary-by-Design ERC20 token which shares many similar characteristics to Bitcoin (BTC). All of the 21 million max supply of BSOV have to be minted through Proof-of-Work (PoW) mining. At the time of writing this, only 3.8 million BSOV have been mined.

BSOV is similar to Bitcoin, but also quite different. The mining process is done through the BSOV Smart-Contract (ERC20+ERC918) itself, and involves making an ETH-Transaction, and sending the the correct solution which is computed by your mining hardware. For instance, look at the latest minting which was done today at Etherscan Block Explorer for the BSOV Smart-Contract:

This transaction did cost $2.36 only in ETH-fees, and minted 50 BSOV. This is just like the Bitcoin (BTC) block reward in the beginning. BSOV follows the same halving schedule as Bitcoin (BTC), so in a while, then only 25 BSOV will be made every reward. This halving will make it 2x as expensive to mint 1 BSOV.

The production cost of these 50 BSOV came to a minimum of $0.047 per BSOV. Now we haven’t even included the electricity cost and cost of mining equipment, and they vary a lot, but if you now compare the BSOV price chart at Coingecko and the Gas-price chart at Etherscan, then you might see some correlation:

There are several factors which determine the price of BSOV, and ETH-fees are one of them.

My Conclusion

The ETH-Fees is a dynamic and ever-changing indicator of value for BSOV, as well as BSOV’s own Mining Difficulty, all the Timelocked BSOV in SovCube.com, the burnt BSOV from the deflationary mechanism, and BSOV’s Liquidity at exchanges, such as Uniswap, and last, but not least — The holders who embrace the low token velocity of BSOV, and treat it like a Store-of-Value, just like intended.