Bitcoin network transaction fees have briefly doubled but remain exceptionally low

Got some satoshis to send or bitcoin (BTC) wallets to reorder? It’s getting cheaper and cheaper to do it. According to a report by Arcane Research, “Bitcoin transaction fees have remained low since July 2021 and show no sign of rising.”

Average bitcoin fees remain very low despite a slight increase over the past week. Source: Arcane Research

However, last week there was a small increase in transaction fees. Shown as a small jump at the end of the diagram, Accumulation in the mempool has seen “the average commissions per transaction per day increase to $691,000 over the past seven days, doubling since last Tuesday.”

However, the increase in transaction costs is insignificant: commissions remained in a low range. The miners performed the mempool transactions in a two-day period, securing the network and keeping the transactions affordable.

Bitcoin network transaction fees have briefly doubled but remain exceptionally low
Bitcoin network transaction fees have briefly doubled but remain exceptionally low

eric yaks, Author of the book about Bitcoin the 7th property told Cointelegraph that there are three main reasons why transaction costs are so low: the introduction of Segwit, hash rate redistribution, and Bitcoin’s Layer 2 infrastructure, such as the Lightning Network, which offers near-instantaneous payments.

“In June 2021, the percentage of Segwit-on-chain transactions increased tremendously from ~50% to ~70% and has steadily increased to over 80%, which should fundamentally boost the performance of transactions for the network.

Cointelegraph reported on it growing number of exchanges with Segwit addresses all year 2021.

In July 2021, Yakes stated that “Network difficulties hit rock bottom and have since climbed to all-time highs,” after China’s ban and hash rate redistribution. Combined with the increase in the number of Segwit transactions:

“This increase in hash rate has found blocks faster than the difficulty setting can follow, and this has resulted in faster than usual transaction processing, thereby lowering the price of transactions.”

However, Yakes does mention this Transaction fees “should not be expected to be permanent. Over time, and it all depends on price, hash rate and difficulty will find their equilibrium, making the fee market less competitive and thus increasing transaction costs.” Transactions”.

tomer strolight, Swan Bitcoin Editor-in-Chief mentions another factor why transaction fees are low:

“Major exchanges now trade in batches. This means they send 100 or more withdrawals in a single transaction, instead of the horrible practice a few years ago of sending each withdrawal as one”.

Thanks to the Lightning Network’s ability to “open channels when the blockchain isn’t congested and then use them again and again, it prevents the network from becoming congested every time a faster and cheaper Lightning transaction is an option.” “.

Lightning Network channels and nodes. Source: explorer.acinq.co

The Arcane research report points out that while these four factors are important, It’s also “likely that a lower number of transactions per day lowered the average commission per transaction.”

for yaks, “Transaction fees could go up in the short term, but there are so many trends against rising fees that I think they will be consistently lower over the long term.”

Tromer is also positive:

“I really see that we can incrementally build the network’s capacity to handle all of the world’s trade without blockchain becoming an insurmountable bottleneck.”

It’s another success for BTC: the protocol continues to scale successfully, making it more affordable to transact on the network.

Clarification: The information and/or opinions expressed in this article do not necessarily reflect the views or editorial line of Cointelegraph. The information contained herein should not be construed as financial advice or investment recommendation. All investment and trading movements involve risk and it is the responsibility of each person to conduct their proper research before making any investment decision.

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