Connect with us
Active Currencies 14437
Market Cap $2,624,013,348,516.30
Bitcoin Share 50.19%
24h Market Cap Change $-4.10

Bitcoin’s transaction numbers rebound, but…

2min Read

Bitcoin transaction fees plunged to their three-month lows despite a robust recovery in transaction numbers.

Share this article

  • Bitcoin’s block interval significantly dipped as the hash rate soared.
  • The number of unconfirmed transactions in the Mempool queue was low.

Transaction fees on the Bitcoin [BTC] network have dropped to their lowest levels since March, potentially causing more hardship for miners. According to a tweet by on-chain analytics firm IntoTheBlock, the total fees collected on 14 July stood at $3.6 million, marking a 37.7% increase from the previous day.


Is your portfolio green? Check out the Bitcoin Profit Calculator


Interestingly, the decline in fees came despite a sharp rebound in on-chain trading activity. As per the Glassnode chart below, transaction numbers witnessed a robust recovery in July after weeks of downtrend.

Source: Glassnode

In fact, the transaction count last weekend reached its highest level since the BRC-20 euphoria of May. What could then possibly explain the dip in fees?

Block intervals dip

The period witnessing the surge in transaction count also saw a sharp uptick in the network hash rate. A growing hash rate is a positive development in the sense that it makes the network more decentralized and secured.

However, a growing hash rate also reduces the rate at which new blocks are mined and added to the chain. As depicted below, the block interval significantly dipped as the hash rate soared. This meant that transactions could be processed quickly without people needing to bid up their fees to jump the line.

Source: Glassnode

According to Mempool data, the number of unconfirmed transactions in the queue at the time of writing was 259,652, a considerable decrease from the 465,000 seen in early May. A fee of $0.3 was being charged, ruling out prioritizing transactions.

Source: Mempool

Miners’ woes continue

Low transaction fees over blockchain networks work in favor of users, especially when making low-value transactions. This bodes well for the widespread adoption of Bitcoin by retail users.

On the contrary, reduced fees adversely impacts miners’ economics. Miners need to be incentivized to validate transactions and secure the Bitcoin network. They rely on these incentives to cover their hardware and electricity costs.


Read Bitcoin’s [BTC] Price Prediction 2023-24


Bitcoin miners fought the punishing bear market of 2022 with tenacity, expecting to recoup their losses in 2023. However, after achieving yearly peaks in May, their earnings have significantly dried up.

Source: Glassnode

Share

Aniket Verma works as a journalist at AMBCrypto. Contrary to most who are primarily interested in merely tracking price movements of cryptos, his focus is on examining the niche intersection between cryptocurrencies and traditional finance. A so-so Bitcoin maximalist, Aniket has a strong disdain for memecoins and the unfounded frenzy they seem to generate every market season. Coming from a strong engineering background, Aniket previously worked as a Content Manager for TV9 Network. Before his stint over there, he was an Associate Multimedia News Producer at Reuters.
Read the best crypto stories of the day in less than 5 minutes
Subscribe to get it daily in your inbox.
Please check the format of your first name and/or email address.

Thank you for subscribing to Unhashed.