Transaction fees on the Bitcoin network have been on a downward trend, reaching their lowest point in eight months. According to data from IntoTheBlock, Bitcoin fees have dropped by 18% this week and 27% from the previous week, marking a significant decline. This decrease in fees comes after a period of high fees earlier this year, with Bitcoin surpassing all other protocols in terms of transaction costs.
One of the main reasons for the surge in fees earlier this year was the launch of the Runes protocol, which allowed for the issuance and transfer of fungible tokens on the network. This, combined with the Ordinals protocol for non-fungible tokens, led to increased activity on the network and higher fees. However, after the halving event, fees began to plummet, reaching only 35% of Bitcoin miner revenue.
Currently, the average cost of a Bitcoin transaction is around 5 sats/vByte, a significant decrease from the 90 sats/vByte recorded in mid-April. The network is now collecting less than $1 million in transaction fees daily, a far cry from the $80 million recorded on the halving day. This decline in fees can be attributed to a decrease in network activity, which has been linked to the recent drop in Bitcoin’s value.
Despite the current low transaction fees, there is speculation that Bitcoin may be poised for a rally soon. With the supply overhang from German authorities easing off, there is potential for the value of Bitcoin to increase in the near future. It remains to be seen whether this potential rally will also lead to an increase in transaction fees on the network.
In conclusion, the recent decrease in Bitcoin transaction fees is a positive development for users of the network. Lower fees make it more affordable to send and receive Bitcoin, encouraging more activity and transactions. As the network continues to evolve and adapt, it will be interesting to see how transaction fees fluctuate in response to market conditions and network activity.