Bitcoin (BTC) transaction fees have been one of the major points hindering the massive adoption of the flagship virtual currency as a means of exchange. However, the fees have dropped dramatically. In the past three months, they have been lower than at any other time in Bitcoins’s history since 2011.
According to cryptocurrency metrics provided by various websites which track transaction fees, Bitcoin transaction fees reached a low of 6.86 satoshi per byte on April 4th & 5th this year. Though, by the end April, the fees had gone up to 39.29 satoshi per byte. The transaction fees have since fallen again, and over the May 26th weekend, fees fell under 10 satoshi per byte. On Sunday the 27th, there was a rate of 8.86 satoshi per byte.
The decline in Bitcoin transaction fees coincides with a drop in daily transaction totals in the flagship digital currency. Towards the end of 2017 when Bitcoin’s price was inching towards record highs, the number of daily transactions were close to half a million. After a massive drop in price in February 2018, the number of daily transactions fell to under 200,000 per day. On May 26th, 2018 when relatively low fees were recorded, there were 158,000 daily registered transactions.
With the transaction fees having dropped to 10 satoshi per byte, this is quite a contrast to fees at the beginning of the year when they were 453.57 satoshi per byte. Low fees imply it is cheaper to transfer the virtual currency among various wallets.
Segregated Witness Soft Fork
Part of the reason why Bitcoin Cash (BCH) was forked from Bitcoin was due to the high transaction fees and the low transaction speeds. The fork promised cheaper fees and faster transaction speeds compared to Bitcoin. But for a couple of hours on Sunday, the transaction fees for Bitcoin were lower than that of Bitcoin Cash.
The low transaction fees that Bitcoin is now enjoying could due to the SegWit soft fork. An estimated 28.34% of transactions are making use of the soft fork. On Sunday, when the fees were particularly low, the figure was 38%.