Tuesday, 27 February 2024

Crypto News

Bitcoin fees hit 20-month high as miner revenues match $69K BTC price

Bitcoin fees hit 20-month high as miner revenues match $69K BTC price

Bitcoin (BTC) on-chain transaction fees are dividing opinion as the cost of sending BTC skyrockets.

Data from statistics resource BitInfoCharts puts the average transaction fee at nearly $40 as of Dec. 17.

Commentators: High Bitcoin fees are inevitable

The latest wave of Bitcoin ordinal inscriptions have resulted in a fresh wave of elevated transaction fees for all network users — but some believe that they are here to stay.

Per BitInfoCharts, it currently costs just over $37 to send BTC on-chain — the highest average figure since April 2021.

Bitcoin average on-chain transaction fee chart (screenshot). Source: BitInfoCharts

Additional figures from Mempool.space show that Bitcoin’s mempool — the size of the unconfirmed on-chain transaction backlog — is vast, resulting in transactions with an attached fee of even $2 having no on-chain priority.

Almost 350,000 transactions are waiting to be confirmed at the time of writing.

Bitcoin mempool data (screenshot). Source: Mempool.space

As casual on-chain spending becomes unviable for many smaller investors, a heated debate among Bitcoin proponents continues.

While many are angry at ordinals’ impact on fees, popular Bitcoin figures argue that double-digit transaction costs are merely a taste of things to come. Those wanting to shield themselves need to embrace so-called “Level 2” solutions such as the Lightning Network, this specifically designed to cater to mass adoption.

“Fees are currently artificially and temporarily high due to JPEG clownery, but it is nothing more than a glimpse into the future. Scaling doesn’t happen on L1,” popular commentator Hodlonaut wrote in one of many posts on the topic on X (formerly Twitter) on Dec. 16.

Continuing, Hodlonaut argued that demanding low fees for “Level 1” transactions is “not just ignorant, it feeds into an attack on bitcoin.”

This reflects on the very composition of Bitcoin itself — a competition-based network gaining value over time as Proof-of-Work intends. Keeping fees low is contradictory, and as hard forks of the Bitcoin network specifically intended to offer that “benefit” have shown, does not attract value.

“Why is it critical to onboard someone to L1 with sub $1 fees, if they can’t afford to move the funds in five years anyway? Go to bcash or another centralized pipe dream already,” Hodlonaut added, referring to one such offshoot, Bitcoin Cash (BCH).

Miners enjoy best USD revenues in two years

Elsewhere, well-known commentator…

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