Bitcoin’s transaction fees quickly doubled but still remained low and the cost of sending one BTC from one to another address stayed low since July 2021 despite the spikes so let’s read further in today’s latest Bitcoin news.
According to an Arcane Research report, Bitcoin’s transaction fees quickly doubled recently but are still low with no other signs of rising. There was a bump in transaction fees last week and it showed that a small jump at the tail end of the graph clustered the meme pool and pushed up the average fees per day over the past week to $691,000 which is a double since a week ago. The doubling in transaction fees is not so significant because the fees remain low and miners are churning in the meme pools securing the network while also keeping the transactions affordable.
Eric Yakes, the author of the BTC book the 7th Property said that there were three main reasons why the costs are so low which include, hash rate redistribution, layer 2 infrastructure, and SegWit adoption. He added:
“June 2021 saw a large increase in the % of Segwit transactions on-chain increasing from ~50% to ~70% which has steadily risen to above 80%, which fundamentally should be increasing transaction throughput for the network.”
In July 2021, Yakes explains that the network difficulty bottomed and hasn’t risen since to a new high especially after china’s ban and the redistribution of the hash rate. Combined with the rise in the number of Segwit transactions:
“This rebound in hash rate has found blocks more rapidly than the difficulty adjustment can keep up with and that has created a more rapid clearing of transactions than otherwise, thus lowering the price of transactions.”
Yakes did mention that the fees should be not expected to remain persistent and this is all contingent upon price, hash rate, and the difficulty which will find their equilibrium which made the fee market less competitive and increased the transaction costs. The editor-in-chief at Swan Bitcoin, Tomer Strolight noted:
“We have the biggest exchanges all batching transactions now. This means they are sending out 100 or more withdrawals on a single transaction instead of the terrible practice from several years ago of sending out each withdrawal as a single one.”
Thanks to the lightning network’s ability to open channels when the blockchain is uncongested and using them over and over to prevent the chain from becoming congested once faster and cheaper is an option.
