The average Bitcoin transaction fee surged 937.7% from $0.74 to $7.679 per transaction on Aug. 22, primarily driven by increased network demand.
Since July, average Bitcoin (BTC) transaction fees have remained relatively stable, comfortably trending under the $2 mark. On Aug. 18, the fees reached historic lows of $0.558. While low fees make it more cheaper for the general public to transfer Bitcoin, it can hurt miner revenue.
The Bitcoin network charges a fee on every BTC transfer to pay miners for authenticating transactions. However, the demand for network bandwidth directly impacts the fees required to send or receive BTC.
Average Bitcoin transaction fees in US dollars. Source: Blockchain.com
0.5 BTC in fees to consolidate 0.55 BTC
According to Blockchain.com and YCharts data, Bitcoin transaction fees shot up 937.7% to $7.679 on Aug. 22, adding pressure on investors. Many members of the crypto community paid excessive fees as a result.
The pseudonymous Bitcoin developer Mononaut reported one example: During a period of peak demand, a user had to pay 0.5 BTC in fees to consolidate 0.55 BTC.
Source: Mononaut
Bitcoin network fees moderate
However, as of Aug. 23, mempool data suggests that average Bitcoin transaction fees have come down to $0.34.
Bitcoin transaction fees. Source: Mempool
Check out Cointelegraph’s guide to learn how to mine cryptocurrency.
Related: Bitcoin transaction value hits yearly high with $25B moved
A recent report from data analytics firm CryptoQuant suggests that Bitcoin demand dropped from a 30-day growth of 496,000 BTC in April to a current negative growth of 25,000 BTC.
Daily change in total Bitcoin holdings. Source: CryptoQuant
The slowdown in demand was apparently pushed by a decline in purchases by spot BTC exchange-traded funds in the United States, which fell from 12,000 BTC in March to an average of 1,300 BTC between Aug. 11 and 17.
Investment firm VanEck, on the other hand, believes that Bitcoin miners could generate around $13.9 billion in additional yearly revenue if they partially transition to providing energy to the artificial intelligence and high-performance computing sector by 2027.
Magazine: Dorsey’s ‘marketplace of algorithms’ could fix social media… so why hasn’t it?