Bitcoin has recently faced some challenges, particularly regarding transaction fees. While the Bitcoin network was previously known for its comparatively lower fees compared to other blockchain networks, the current situation has evolved.
According to data from YCharts, the average transaction fee for Bitcoin has surpassed $30, currently sitting at $30.91. The data indicate that transaction fees have increased nearly 10 times since the beginning of May.
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On May 1, Bitcoin transaction fees were recorded at $2.952, which then increased to $7.1 on the 2nd and 3rd of May. The fees continued to fluctuate, reaching $19.21 on May 7, and have experienced further surges since then.
The average #Bitcoin transaction fee is now above $30. May as well send a wire transfer at this point. pic.twitter.com/YrXjO4EzPj
— Mati Greenspan (@MatiGreenspan) May 9, 2023
The recent surge in Bitcoin transaction fees has garnered the attention of various exchanges, such as Binance and Coinbase, prompting them to consider adopting the Lightning Network. The Lightning Network is renowned for its ability to facilitate fast and cost-effective transactions. Several exchanges, including Kraken, OKX, and Bitfinex, have already implemented support for the Lightning Network to enhance transaction speed and affordability.
What triggered the spike in Bitcoin fees?
Crypto transaction fees are known to fluctuate due to various factors, and one such factor contributing to the increase in Bitcoin’s transaction fees is the introduction of BRC-20.
BRC-20 is a token standard that was launched in March 2023 on an experimental basis. Similar to ERC-20 tokens, BRC-20 tokens are fungible and enable users to trade fungible assets within the Ordinals protocol. The introduction of the BRC-20 standard has also facilitated the creation of several meme coins, including ORDI, PEPE, DOMO, and PUNK.
The growing popularity of these meme coins, particularly PEPE, has placed additional strain on the Bitcoin network, resulting in increased transaction fees. However, analysts and Bitcoin enthusiasts believe that the network will eventually stabilize, leading to a reduction in fees.