Bitcoin’s network fees have seen a significant increase after a period of lower onchain fees, with the cost of sending bitcoin soaring to an average of 73.3 satoshis per virtual byte (sats/vB), or $11.48 per transaction. This rise comes amid a backlog of 207 mempool blocks, resulting in around 134,000 unconfirmed transactions lingering since November 3, 2023.
A Sharp Increase in Onchain Transaction Costs
Between February 18 and February 25, 2024, the average cost for an onchain Bitcoin transaction remained under the $5 mark, with median-sized transaction fees not exceeding $2. However, by Wednesday, the average fee had jumped to $11.48, and the median fee had increased to $6.10 per transaction, marking a 129.6% rise in the average fee and a 204.99% increase in the median fee within just four days.
Unconfirmed Transactions Pile Up
The current backlog includes close to 134,000 unconfirmed transactions, according to Johoe’s Bitcoin Mempool Statistics, with Mempool.space data revealing 211 mempool blocks in the queue, equating to 378 megabytes of transaction space. Some transactions are still being processed at a lower rate of 15 sats/vB.
Impact on Miners and the Network
The recent upsurge in bitcoin’s value, coupled with increased onchain fees, has significantly enhanced miners’ profits. The hash price, or the estimated earnings from 1 petahash per second (PH/s) of computing power per day, is nearing the $110 mark. Despite the higher BTC price, miners’ revenue from January 2024 remained consistent, though income from transaction fees saw a slight decrease. Additionally, the Lightning Network’s capacity has been on a downward trend since the beginning of February 2024.
This recent escalation in transaction fees and the subsequent backlog of unconfirmed transactions underscore the volatile nature of Bitcoin’s network fees and highlight the ongoing challenges in managing network congestion and scaling solutions.
