Amid the crypto winter, the world’s most popular crypto still seems to enjoy the trust of investors. The average transaction fees on the Bitcoin blockchain fell below $1 for the first time in over two years. For perspective, higher transaction fee tends to discourage users, especially those who make low-value transactions.
At the time of writing, Bitcoin transaction fee stands at $0.825, a level last seen on 13 June, 2020.
It is important to note that BTC transaction fee did not fall sharply in the charts. The all-time low was achieved over a period of time.
Why are transaction fees important?
Transaction fees are an essential part of all blockchain ecosystems. While a high fee restricts users from using the network, a low fee raises security alarms. Therefore, a minimal fee that satisfies both the parties is essential to keep the ecosystem balanced.
Moreover, a very low transaction fee combined with a high difficulty level is counterproductive to the miners who spend more computational power to get the hash value only to get lesser incentives for mining a block. So, for the sake of the miners, the transaction fee and the difficulty level should be on par with the other.
In fact, one of Bitcoin’s biggest drawbacks was the high transaction fee, but upgrades like the Lightning Network and Taproot have made it cheaper.
After hitting an all-time high of $69,045 in November 2021, Bitcoin price has been on a downward spiral, but the price is not the only factor holding investors’ trust. Truth be told, the number of BTC wholecoiners—Bitcoin wallet that holds a whole Bitcoin—surged by 40,000 in the year-to-date period.