Bitcoin fees hit 20-month high as miner revenues match $69K BTC price
2023.12.17 05:52
Bitcoin (BTC) on-chain transaction fees are dividing opinion as the cost of sending BTC skyrockets.
Data from statistics resource BitInfoCharts puts the average transaction fee at nearly $40 as of Dec. 17.
Commentators: High Bitcoin fees are inevitable
The latest wave of Bitcoin ordinal inscriptions have resulted in a fresh wave of elevated transaction fees for all network users — but some believe that they are here to stay.
Per BitInfoCharts, it currently costs just over $37 to send BTC on-chain — the highest average figure since April 2021.
Bitcoin average on-chain transaction fee chart (screenshot). Source: BitInfoCharts
Additional figures from Mempool.space show that Bitcoin’s mempool — the size of the unconfirmed on-chain transaction backlog — is vast, resulting in transactions with an attached fee of even $2 having no on-chain priority.
Almost 350,000 transactions are waiting to be confirmed at the time of writing.
Bitcoin mempool data (screenshot). Source: Mempool.space
As casual on-chain spending becomes unviable for many smaller investors, a heated debate among Bitcoin proponents continues.
While many are angry at ordinals’ impact on fees, popular Bitcoin figures argue that double-digit transaction costs are merely a taste of things to come. Those wanting to shield themselves need to embrace so-called “Level 2” solutions such as the Lightning Network, this specifically designed to cater to mass adoption.
“Fees are currently artificially and temporarily high due to JPEG clownery, but it is nothing more than a glimpse into the future. Scaling doesn’t happen on L1,” popular commentator Hodlonaut wrote in one of many posts on the topic on X (formerly Twitter) on Dec. 16.
Continuing, Hodlonaut argued that demanding low fees for “Level 1” transactions is “not just ignorant, it feeds into an attack on bitcoin.”
This reflects on the very composition of Bitcoin itself — a competition-based network gaining value over time as Proof-of-Work intends. Keeping fees low is contradictory, and as hard forks of the Bitcoin network specifically intended to offer that “benefit” have shown, does not attract value.
“Why is it critical to onboard someone to L1 with sub $1 fees, if they can’t afford to move the funds in five years anyway? Go to bcash or another centralized pipe dream already,” Hodlonaut added, referring to one such offshoot, Bitcoin Cash (BCH).
Miners enjoy best USD revenues in two years
Elsewhere, well-known commentator Beautyon reiterated that despite the fees, Bitcoin continues to function as intended.
Related: Navigating this bull market and securing profit will be tougher than it seems
“If Ordinals bring the high on chain world to everyone earlier than expected, it will act like a scythe cutting down everyone who did not accept a Layer 2 solution to the network fee problem,” part of a recent X post stated.
“Many users will be confused, upset and ready to abandon Bitcoin. There will be no recourse for them, obviously, because there is no one to blame, no one to seek compensation from; after all this is the normal state of the network. The rules are being followed, and those are the rules you agreed to, Bored Apes!”
That perspective is shared by Bitcoin veteran Adam Back, co-founder of Bitcoin and blockchain technology firm Blockstream.
For him, the answer likewise lies in expanding Level 2 capabilities instead of relying on anything beyond miner fee incentives.
“You can’t stop JPEGs on bitcoin,” he concluded.
“Complaining will only make them do it more. Trying to stop them and they’ll do it in worse ways. The high fees drive adoption of layer2 and force innovation. So relax and build things.”
Bitcoin miner revenue chart (screenshot). Source: Blockchain.com
Data from Blockchain.com shows miners’ revenue — the sum total of block subsidies and fees in USD — hitting levels last seen when Bitcoin hit its current $69,000 all-time high in November 2021.
BTC/USD traded at around $42,000 toward the Dec. 17 weekly close, per data from Cointelegraph Markets Pro and TradingView.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
