Some days ago, Bitcoin transaction fees experienced a huge increase. People began experiencing fees that they experienced back in the previous bull run back in 2021. Understanding that we are currently in the recovery phase, this should not be the case. Bitcoin transaction fees have soared to an average of $19.20 per transfer in the past week and an average of $28.10 in the past 24 hours.
Historically, Bitcoin is celebrated for its low transaction fees. The current scenario, however, paints a different picture. This significant hike has been largely attributed to an uncleared backlog in the Bitcoin mempool, which has over 400,000 transactions waiting for confirmation.
Several industry experts have also pointed out the recent trend of BRC-20 tokens as a possible factor. BRC-20 is a new Bitcoin token standard, and the number of projects utilizing this standard has seen a substantial uptick in recent weeks. This influx could be a major contributing factor to the transaction fee escalation. Normally, these tokens do not support smart contracts but can be utilized through wallets supporting the Bitcoin blockchain.
Bitcoin’s unusually high transaction fees are leading users to seek alternatives, with Bitcoin Cash appearing to be a preferable option. Bitcoin Cash, a hard fork of Bitcoin, carries most of the same features as its predecessor. The crucial difference lies in the block size permitted by the two blockchains. Bitcoin Cash can process more transactions simultaneously, which could be an attractive feature for users in the current climate.
Bitcoin SV, Bitcoin Cash, And Other Bitcoin Hard Forks Increase In Value
In a remarkable market twist, Bitcoin Cash (BCH) has experienced a notable surge in value. Two days ago, BCH was trading at $109, and yesterday it skyrocketed to $122, an approximate 10% increase. Another Bitcoin alternative that experienced a huge increase in price is Bitcoin SV (BSV). This cryptocurrency was trading at a price of $29.50 on the 9th of May. Yesterday, however, BSV reached a trading value of around $43.25. This marked an increase of over 30% in just 24 hours.
Bitcoin’s current turmoil seems to be benefitting its hard forks, Bitcoin Cash and Bitcoin SV, as users search for cheaper, faster alternatives. This has resulted in a boost in popularity and value for these forks. Given their significantly lower transaction fees, Bitcoin Cash and Bitcoin SV have emerged as more enticing choices for traders amidst Bitcoin’s ongoing fee fiasco.
Bitcoin’s Current Transaction Fees
Sunday, May 7, 2023, marked a historic moment for Bitcoin as transaction fees exceeded the block reward at a block height of 788,695. This event hasn’t happened since December 2017 and signifies a potentially troubling trend for the leading cryptocurrency. Skepticism is rising that Bitcoin might struggle with mass adoption given the current fee structure and its current capacity to execute blocks.
At the height of the crisis, fees reached as high as $31 per transaction. Presently, an average transaction incurs a fee of 0.0004 BTC or $11.00, with the median-sized fee standing at 0.00011 BTC or $3.20 per transfer.
Adding to the market uncertainty, high-priority transactions now require a fee exceeding $22 per transaction. Medium-priority transactions hover around $19. This increase has led to Bitcoin’s usual ten-minute block intervals being surpassed multiple times. The last block, block 789,237, took over 13 minutes to be mined, with an average fee of around 0.00049 BTC or $14.00.