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Bitcoin (BTC) transaction fees have dropped dramatically

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After the recent decreased difficulty, there has been a notable drop in bitcoin transaction fees.

After halving, block time increased to a peak of more than 14 minutes on May 17, with a sharp drop in confirmed daily transactions.

In particular, on May 24 they were only around 214,000, while the day after the halving they were 345,000.

This very significant reduction in the number of confirmed daily transactions had caused the cost of fees will skyrocket.

The average rate it rose from $ 0.6 in late April to more than $ 6, with a post-halving peak of $ 6.6 on May 20.

In the same period, the average rate went from $ 0.3 to $ 3.9 on May 20, following the same trend.

Now everything seems to be back to normal, with an average daily rate of around $ 1, while the median returned below $ 0.4.

In other words, in Compared to the May 20 peak, the drop was more than 84% for the average and more than 90% for the median.

This collapse is due to a drastic reduction in block time, which fell back well below 10 minutes, bringing the number of daily validated transactions back to around 300,000.

Truth be told, these are still very few, especially compared to the nearly 1 million daily transactions that the Ethereum blockchain is processing these days.

The fact is that the 1MB maximum limit for Bitcoin blocks prevents validating more than approximately 3,000 transactions per block, and since a block is generally mined every 10 minutes, it is rare for it to exceed 350,000 transactions per day.

This leads to higher fees being charged when the Bitcoin blockchain is more congested, because it is based precisely on the fees that miners choose which transactions to include or not in the blocks they mine.

However, it must be said that while there are no plans to change the 1MB block size limit, there are already workarounds that allow moving BTC at significantly lower costs.

First of all, there is Lightning Network, which, while not yet widely used, dramatically lowers fees thanks to off-chain transactions.

Also, paradoxically, the Ethereum blockchain could help, thanks to ERC20 tokens such as WBTC or pBTC, which allow transfer of a value equivalent to that of BTC but using the Ethereum blockchain, and not that of Bitcoin.

This solution is used more and more and given that with the probable future introduction of Proof of participation in EthereumBy replacing Proof of Work, the volume of transactions manageable by this blockchain will be even higher and with lower fees.



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