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On-chain activity: Bitcoin’s Fee Ratio Multiple drops as price rises

Steven Zheng
What is the Fee Ratio Multiple?The Fee Ratio Multiple (FRM) was created by The Block’s analyst, Matteo Leibowitz, as a way to measure the security of a Proof-of-Work chain.The post On-chain activity: Bitcoin's Fee Ratio Multiple drops as price rises appeared first on The Block.

What is the Fee Ratio Multiple?

The Fee Ratio Multiple (FRM) was created by The Block’s analyst, Matteo Leibowitz, as a way to measure the security of a Proof-of-Work chain. The metric provides a framework to examine how secure chains will be once their block rewards disappear. In other words, how many multiples of the current transaction fees would be required to maintain a chain’s current level of security.

A low FRM suggests a chain can maintain its security level without relying on additional inflation of its native asset. A high FRM suggests that, unless transaction fees greatly increase, a chain will require high inflation of its block reward subsidies to maintain its security.

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