Do you have some satoshis to send or Bitcoin (BTC) wallets to rearrange? 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, showing no signs of increasing.”
However, last week there was a small uptick in transaction fees. Shown as a small jump in the tail of the graph, the accumulation in the mempool made “the average of the commissions per transaction per day rise in the last seven days to USD 691,000, which is double since last Tuesday.”
However, the uptick in transaction costs is negligible: commissions remained in a low range. The miners completed the mempool transactions in a two-day period, securing the network and keeping the transactions affordable.
Eric Yaks, author of the book on Bitcoin the 7th Property told Cointelegraph that there are three main reasons why transaction costs are so low: the adoption of Segwit, hash rate redistribution, and Bitcoin’s layer 2 infrastructure, such as the Lightning Network, which offers near-instantaneous payments.
“June 2021 saw a huge increase in the % of Segwit on-chain transactions from ~50% to ~70% and has steadily increased to over 80%, which fundamentally should be increasing the performance of transactions for the network.
Cointelegraph reported on the growing number of exchanges using Segwit addresses throughout 2021.
In July 2021, Yakes explained that “network difficulty hit a low and has since climbed to all-time highs,” following China’s ban and hash rate redistribution. Combined with the increase in the number of Segwit transactions:
“This spike in hash rate has found blocks faster than the difficulty adjustment can keep up with and that has created faster transaction clearing than otherwise, thereby lowering the price of transactions.”
However, Yakes mentions that transaction fees “should not be expected to be persistent. Over time, and it all depends on price, hash rate and difficulty will find their balance, making the fee market less competitive and thus increasing transaction costs.” “.
Tomer Strolight, editor-in-chief of Swan Bitcoin, mentions another factor why transaction fees are low:
“Major exchanges now do all transactions in batches. This means they are sending 100 or more withdrawals in a single transaction instead of the terrible practice several years ago of sending each withdrawal as one.”
In addition, thanks to the Lightning Network’s ability to open “channels when the blockchain is not congested and then use them over and over again, it prevents the network from becoming congested whenever a faster and cheaper Lightning transaction is an option.”
Arcane’s research report indicates that while these four factors are important, it is also “likely that fewer transactions per day have lowered the average fee 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 persistently lower in the long term.”
Tromer is also positive:
“I genuinely see that we can gradually build the capacity of the network to handle all the commerce in the world without the blockchain becoming an insurmountable bottleneck.”
It is another achievement for BTC: the protocol continues to successfully scale, making it more affordable to transact on the network.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
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