Bitcoin Transaction Fees Are up More Than 5x Since January 1By Andy Hao
On February 22, Bitcoin’s transaction fees were the most expensive they’ve been at any point so far this year. Today, these fees have barely improved. This is the case when looking at either Bitcoin’s transaction fees in BTC, and/or when considering the currency’s fees relative to the US dollar.
Bitcoin fees are still much cheaper than they were during the bull run
According to BitcoinFees, the average cost to send a Bitcoin transaction within the next block is currently 32 satoshis, as of January 23, 2019. A satoshi is the smallest unit of Bitcoin, and is one one-hundred-millionth of a coin.
Sending a transaction within the next block means that, in theory at least, your transaction should be confirmed within ten minutes. Allowing a transaction to take 30 minutes (3 blocks) will cost you about the same amount at the current point in time. However, if you can wait an hour (or 6 blocks) your transaction could cost as little as 7 satoshis per byte.
Since the site estimates that the average Bitcoin transaction is made up of about 250 bytes, this means that you’re looking at a fee of about $0.32 USD to have your transaction confirmed within the next 10-30 minutes, according to current BTC to USD conversion rates.
This is still a huge improvement from Bitcoin’s transaction fees in late 2017 and early 2018.
Around that time, trying to send a timely Bitcoin transaction could easily cost you an amount in the double digits. At its most expensive ever, sending a Bitcoin transaction fee within 30 minutes came with a fee of around $37 USD on December 21, 2017.
Since the currency’s fees increase as the network is placed under significant stress, when Bitcoin is particularly popular, fees rise. To address this issue, improvements have to be made to Bitcoin’s scaling.
Falling from the six-year low
In January, LongHash reported that the amount of BTC needed to send a transaction was at its lowest in six years. Comparing these figures to recent transaction fees demonstrates the extent of the fee increase.
At the beginning of this year, sending a Bitcoin transaction within ten minutes (one block) could cost as low as $0.05 USD a transaction. For users that were willing to wait an hour (six blocks), transaction fees were as low as $0.02 USD.
Looking at the difference in the price of a transaction between January 1 and today shows that, relative to the US dollar, the fee for a ten minute transaction increased over 500%. However, this metric is mudied by Bitcoin’s price relative to the US dollar fluctuating as well. On January 1, the cost of one Bitcoin was around $3,700 USD — compared to the $3,940 price that Coinbase lists it at today.
This makes looking at transaction fees relative to satoshi per byte a more apt comparison. On January 1, 2019, sending a transaction within the next block would cost just 5 satoshis per byte. This means that the average Bitcoin transaction would cost around 1,250 satoshi.
Today, sending this same transaction costs 32 satoshis per byte, meaning the average transaction would cost around 8,000 satoshi. This marks a 5.4x increase from the remarkably cheap Bitcoin fees that kickstarted the year.