Bitcoin network transaction fees have fallen by 18% this week, following a previous 27% drop. This marks a significant decrease in fees, continuing a trend observed since the last peak during the halving event. According to data from IntoTheBlock, Bitcoin fees have reached their lowest level since November 2023.
What is Happening in the Bitcoin Ecosystem?
Three months ago, Bitcoin saw the highest transaction fees among all protocols, including Ethereum. The surge in fees occurred just before the last Bitcoin halving event, driven by increased network activity and the introduction of the Runes protocol. The Runes protocol enhances the network’s functionality by enabling the issuance and transfer of fungible tokens, combining with the existing Ordinals protocol for non-fungible tokens.
However, shortly after the halving event, transaction fees began to decline. Fees, which constituted 75% of Bitcoin miners’ revenue before the event, dropped to 35%. Daily fees, which soared to 80 million dollars on the day of the halving, have now plummeted to under 6 million dollars weekly.
Details on the Subject
Data from Mempool.space reveals that the average cost of a Bitcoin transaction is now approximately 5 sat/vByte, equivalent to 0.0029 dollars. This is a significant reduction from the 90 sats/vByte (8.50 dollars) recorded in mid-April. YCharts data also shows that Bitcoin collects less than 1 million dollars in daily transaction fees, a far cry from the 1 million dollars recorded on July 3rd.
Key Insights for Users
• Bitcoin transaction fees have significantly decreased, offering a more cost-effective transaction environment.
• The introduction of the Runes protocol has been a pivotal factor in initial fee increases.
• The decline in fees is partly due to decreased network activities and Bitcoin’s recent loss in value.
• Current transaction costs are at their lowest since November 2023, providing an opportune moment for transactions.
Conclusion
The decline in Bitcoin transaction fees can be attributed to various factors, including reduced network activities and Bitcoin’s recent devaluation. The German authorities’ surplus is expected to decrease soon, potentially setting the stage for a Bitcoin price rebound. Whether this will affect transaction fees remains to be seen.