Bitcoin (BTC) Fees Grow with Usage, Still Outpaced by Block Reward
In the future, BTC transaction fees may become key to miner gains, as block rewards slide.
Bitcoin (BTC) saw significant fluctuations in overall fees,
with heightened activity leading to unexpected, unpredictable gains for miners. Fees are still a small part of the BTC economy, as block rewards of 1,800 coins per day still bring significantly higher gains. However, with the block reward halved in May 2020, it is possible that with time, fees get closer and closer to the overall block reward. But the chief appeal of BTC is more efficient fee structure, which means billions can be sent for
relatively smaller fees.
Transaction fees collected by Bitcoin miners saw some wide swings in 2019, averaging $100,000 a day during quiet periods but spiking to $2,000,000 per day during busy times. The 2019 fee spike was still less than 10% of the highest fee days seen in 2018.
Fees decrease as SegWit adoption spreads, with more addresses using optimized information storage. But BTC blocks also fill up to capacity, making the fees rise. For now, BTC has no block size limit, with occasional larger blocks. Bitcoin daily transactions remain close to 300,000, with transaction value just under $1 billion’s equivalent, slowing down in the past weeks. But the biggest factor in the BTC economy remains mining. The Bitcoin network hashrate is above 101 EH/s again after a day of climbing. Miners remain dedicated to catching the last of the larger block rewards, while also serving to secure the current relatively high demand for transactions. BTC on-chain activity has shown a strong correlation with price rallies. For now, as prices find another tier of stability, activity has diminished. Flows to and from exchanges
also remain limited.
A look back at peaks in $BTC on-chain fundamentals in 2019. Interesting to see which metrics peak first in the lead up to the 19' price run
The past year saw heightened BTC statistics, despite the fact prices were still far from their all-time peak. But coin activity won’t tell the whole story about prices in 2020, as the leading coin will also rely on futures and options markets, where no actual BTC transfers would be needed. BTC traded at $7,358.05, as the coin erased the gains made above $7,400. Activity does not seem to be winding down in the last days of the year, as bearish pressures once again lead to highly active trading.
Article Produced By Christine Masters
Business writer with a knack for bubbles and market madness. Has tracked it all: the financial crisis of 2008 and the implosion of Lehman Brothers; bank bailouts and peak gold and silver, penny stocks…and now Christine has moved to cryptocurrencies for fresh stories.