The costs of sending bitcoin are rising. The latest figures from blockchain analytics firm BitInfoCharts (as of December 17) show that the average transaction fee is now around $40. This surge, largely due to rumors about Bitcoin Ordinals, has driven up fees throughout the entire ecosystem. Some analysts predict that changes may be permanent.
Bitcoin’s Transaction Fee Today
According to BitInfoCharts, the cost of doing a Bitcoin transaction within the ecosystem comes in at just under $ 37 dollars. This is an average price not seen since April last year. Besides, according to data from the Mempool Space blockchain analytics platform, Bitcoin’s mempool (a collection of unverified on-chain transactions) is extremely clogged. Thus transactions involving even an extra fee of $ 2 are not given priority. Currently, there are about 350,00 transactions pending confirmation.
Steadily rising daily on-chain transaction costs have become prohibitive to many smaller investors, causing a heated debate among Bitcoin fans. The impact of Ordinals on transaction fees has received mixed opinions, although some leading investors in Bitcoin see high commissions as part of the growing pains to develop further.
Insights from a Leading Analyst
In view of this, users are urged to accept Layer-2 solutions such as the Lightning Network which is aimed at more widespread use. Well-known analyst Hodlonaut, in a statement released on December 16, remarked:
Fees are temporarily exaggerated by JPEG activities, but it’s just a taste of what is to come. The real scaling actually goes beyond Layer-1.”
And Hodlonaut also observes that criticizing Layer 1 for high fees betrays a lack of understanding and actually flies in the face of Bitcoin’s very nature. Using competitive proof of work to define the network’s value, but setting low fees is contrary–we have seen various hard forks on the bitcoin network that focused precisely on reducing transactions costs. Referencing Bitcoin Cash, Hodlonaut stated:
Why should the Layer-1 network be concerned with sub-$ 1 fees if users can’t adapt within five years? They might as well switch to an alternative centralized fantasy like Bitcoin Cash.
Disclaimer: This is not a financial advice article. Cryptocurrency is very volatile. Investors must decide for themselves if it’s a good investment.