The average transaction fee of Bitcoin (BTC) surged 937.7% — from $0.74 to $7.679 — per transaction on Aug. 22, primarily driven by increased network demand.
Since July, the average transaction fees for Bitcoin have remained relatively stable, comfortably trending under the $2 mark. On Aug. 18, the fees reached historic lows of $0.558. While low costs make it more feasible for the general public to transfer Bitcoin, it may hurt miner’s 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 over the Bitcoin blockchain network.
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 had to pay excessive fees during the process.
One example of this was reported by the pseudonymous Bitcoin developer Mononaut, who shared that a user had to pay 0.5 BTC in fees to consolidate 0.55 BTC during a period of peak demand.
Source: Mononautical
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.
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 (ETFs) in the United States — from 12,000 BTC in March to an average of 1,300 BTC between Aug. 11 and Aug. 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 (HPC) sector by 2027.
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