The data shows that Bitcoin’s total transaction fees have continued to be at historically low prices, despite a recent spike in the fall of LUNA.
Bitcoin transaction fees have shifted since July 2021
According to a recent weekly report from Glasnod, the total transaction fees on the BTC network have been very low for almost a year now.
“Total transaction fees” is a measure of the sum of the fees that each user of the network pays for each transaction in the Bitcoin blockchain.
Miners accept transactions based on what would be more profitable to operate at the moment. Transactions involving high fees are usually picked up first.
During periods of high network demand (i.e., large volumes of transactions occur), traffic jams occur in Memphis.
This means that some transactions may be stuck for a while as miners take their time to go through the crowded mempol.
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So, during such periods, users who want to prioritize their transfers start paying higher fees. More and more users join them and the average transaction fee increases.
When the demand for bitcoin networks is low, however, this type of catwalk competition no longer exists and fees are naturally lower.
Now, here is a chart showing the total transaction fee trends in the BTC blockchain over the last few years:
Seems like the value of the metric observed a small spike recently | Source: Glassnode's The Week Onchain - Week 21, 2022
As you can see in the graph above, the total bitcoin transaction fee since July last year is very low, around 10 to 12 BTC per day.
The value of the index has recently risen after the fall of LUNA and UST and consequent market turmoil.
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This spike has doubled transaction fees, but despite this increase, fees are still much lower than what was seen in the first half of 2020 and 2021.
One effect of these lower transaction fees is that the income of bitcoin miners has also declined significantly in recent months.
At the moment, it’s not clear when Fee could observe a resurgence. One thing is for sure, there will be a high demand for blockspace for any fee to see any significant movement.
At the time of writing, the price of Bitcoin is about $ 29.1 thousand, down 1% in the last seven days. The chart below shows the price trend of BTC in the last five days.
Looks like the price of BTC has sunk over the past couple of days | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Glassnode.com