The average fees required to send a bitcoin transaction are on the rise again.
After hovering steadily around the $0.50 mark over the last six months, data shows average fees hit their highest level in nearly a year in early April, according to data from Bitinfocharts. Since then, averages fees have swelled to around $1 to $2, a move that coincided with bitcoin’s price “break out” earlier this month.
Graph via Bitinfocharts.com
Bitcoin fees are required because there’s limited room in every block added to the bitcoin blockchain – a feature most blockchains face in order to fulfill its goal of giving users control over their money.
When the blockchain gets more popular, a user needs to compete with all the other people trying to get their transaction through. As such, a user needs to spend a bit more money on the fee to incentivize the miners securing the network to push through a transaction faster by prioritizing theirs over others.
What might be contributing this time around? As bitcoin blocks fill up with transactions, fees increase. And indeed, the number of transactions waiting in the mempool saw a sharp spike earlier this month.
As such, sources painted rising fees an inevitability, especially if interest in bitcoin continues to increase.
Seoul bitcoin meetup founder Ruben Somsen, who’s been outspoken about fees, told CoinDesk:
“As long as more people become interested in bitcoin, fees will inevitably rise.”
To an extent, this is simply how bitcoin works.
There’s limited space for transactions in the bitcoin blockchain.