 | Transaction fees on the Bitcoin (BTC) network continue to rise and, on this first Tuesday of May (02), already register an average of more than US$ 4.40 per transaction, which is equivalent to the average price of a single Big Mac in the world. At one point, the minimum fee of 105 sats/vB ($4.20) for low-priority transactions was recorded, according to mempool.space. The measurement means that a fee of 101 satoshis (the smallest unit of BTC) is charged for each "Virtual Byte" (the unit of measurement of the "weight" of digital data, in bytes) in non-urgent transactions. The High Priority fee was at 131 sat/vB (US$ 5.24), the average price of a Big Mac in the United States, according to the "Big Mac Index", by The Economist. There are currently almost 300,000 transactions waiting to be confirmed and the number continues to increase as this report is built. The increase in fees is a direct reflection of increased network usage and demand for block space on the leading cryptocurrency blockchain. That can occur at times of high volatility, with investors moving their BTCs in buy and sell operations, or simply with more people using the network for various reasons. Each Bitcoin block can hold a maximum of 4MB (four megabytes) in transactions, and each transaction has a different weight that can vary from around 200 bytes to more than 1MB, depending on the type and content of the Tx. To be able to "buy" this space, encouraging a miner to add the transaction to the next mined block, users configure a fee that will be collected by the miner in the round. The higher the rate, the more likely the transaction will be added to the next block. In times of high demand for space, with an increase in transactions waiting to be confirmed, users can start to "bids" higher, "jumping the queue" of other users and guaranteeing the confirmation of their transaction. This is what causes rates to rise — as observed today (Tuesday). Since the beginning of March 2023, an accumulation of transactions and blocks on hold on the Bitcoin blockchain has been observed. First documented in this Twitter thread. In the last two months, the indicators have changed a lot, indicating a continuation of the increase in fees and competition for space in the network's blocks. On March 8th, 18,000 transactions were registered awaiting confirmation, with high priority rates of 20 sat/vB (US$0.62). Just over a month later, on April 13, 2023, the average confirmation time for a Bitcoin transaction reached record values not seen for two years. With an average BTC shipment taking around 15 hours to be received by the recipient. Also documented on Twitter. On this day of long waiting hours, users paid an average fee of $2.36 to send Bitcoin, according to BitInfoCharts. Last week, April 26, the backlog of transactions in the mempool continued to worsen, again breaking two-year highs and preparing Bitcoin investors and users for the spike in fees being observed today. Documented here. At that time, more than 125 thousand transactions were accumulated waiting for miners to add them in blocks to be completed. The mempool is the virtual "place" within the nodes (or servers) of the network where transactions are stored until they are confirmed on the blockchain by the proof-of-work process. Mining fees continued to be in the $2 range, but have started to rise higher since then. With US$ 2.18 on the 26th and US$ 2.90 on the 27th. At the time of writing, you can see an average fee of $4.42 per transaction over the last 144 blocks (or 24 hours), according to mempool.space. Enthusiast Johoe's node provides a graph to better visualize the accumulation of fees in its own mempool. In the chart it is possible to observe an increase in the amount of fees in BTC awaiting confirmation, with the peak this Tuesday of a spike that began on the 26th, as reported in my personal Twitter. [link] [comments] |
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