Bitcoin transaction fees fall to their lowest level in 4 years

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By TP

Bitcoin (BTC) users are transacting cheaply right now as the average fee cost has dropped to its lowest level in four years. As shown by the mempool space explorer, at the time of writing, a bitcoin transaction in high, low or medium priority only costs between 6 and 8 sat/vB, equivalent to less than a dollar, exactly below 0.75 cents. This is a figure that was last seen in 2020, during the Covid-19 pandemic.

Cheap commissions stand out now, precisely when 100 days have passed since the Bitcoin halving, as BitcoinDynamic reported earlier. This means that three months have passed since commissions skyrocketed to cost $200 for send BTC in the blocks after the fourth halving.

Bitcoin transaction fees are back to being as cheap as they were 4 years ago. Source: The Block. At that time, there was a high demand for block space due to the launch of the Bitcoin Runes protocol, which allows the possibility of creating fungible tokens, such as memecoins and others, on the digital currency network created by Satoshi Nakamoto. However, now things have changed, reducing transaction fees to a minimum, something that brings benefits to users in general, but which represents less income for Bitcoin miners. These hashrate producers profit from the reward that includes transaction fees, in addition to the block subsidy, which after the fourth halving is at 3.125 BTC. The first of these refers to payments in satoshis (BTC's unit of measurement) that users include as part of their transactions and that miners receive as compensation for solving blocks on the network. Historically, the block subsidy has represented a much more significant part of miners' income than transaction fees. However, during the halving, it was thought that increasing transaction fees would be key to miners' resilience, but now things have taken a turn for the worse again. As a result, Bitcoin miners often earned less than $30 million per day in July, about half as much as in March and April. CryptoQuant is therefore warning that daily miner outflows have skyrocketed while the network hash rate continues to decline and average revenue per hash is hovering around an all-time low.