Average transaction fees on the Bitcoin (BTC) blockchain have fallen below $1 for the first time in more than two years, further boosting its use as a viable consumer financial system.
High transaction fees on blockchain networks are detrimental to users, especially when making low-value transactions. For example, transaction fees on the Ethereum blockchain have increased several times during the non-negotiable token (NFT) craze, causing stress among users in general.
While the Bitcoin ecosystem has suffered its share of high transaction fees in the past, timely updates – including the Lightning Network and Taproot – ensure faster and cheaper transactions over time. As of Monday, the average Bitcoin transaction fee has dropped to $0.825, a figure last seen on June 13, 2020.
Along with timely upgrades, the decrease in transaction fees can be attributed to various factors, including falling market prices and decreasing mining difficulty. However, the difficulty of mining a new block of BTC is steadily increasing as miners gain access to cheaper hardware and recover from the long chip shortage.
As we saw above, August was also the end of the network’s three-month plunge into difficulty, which went down to 28.351 trillion after a free fall. Thanks to the continued efforts of the community, the Bitcoin network continues to show the telltale signs of a healthy financial system.
Also read: Pushing the Bitcoin network to be more scalable with zk-proofs
While users expect every network upgrade to reduce gas charges and transaction speed, not all upgrades are built to serve the same purpose. For example, Ethereum’s most anticipated upgrade, The Merge, will not reduce gas fees.
As the Ethereum Foundation explains:
“The Merger deprecates the use of proof-of-work, moving to proof-of-stake for consensus, but does not significantly change parameters that directly affect network capacity or throughput. »
The Merge upgrade involves combining the existing runtime layer of the Ethereum mainnet with Beacon Chain, effectively eliminating the need for power-intensive mining.