Share of Miner Revenue from Bitcoin Transaction Fees Skyrockets to Early 2018 Levels

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Tue, 05/19/2020 - 14:30
Alex Dovbnya

Skyrocketing Bitcoin (BTC) transaction fees have become the bread and butter of cryptocurrency miners that are reeling from the recent subsidy cut

Cover image via stock.adobe.com
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According to data provided by on-chain analytics firm Glassnode, Bitcoin miners now derive close to 15 percent of their revenue from transaction fees.

This is the highest level since early 2018 when the cryptocurrency industry was in the middle of the retail-driven crypto frenzy.

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Bitcoin is becoming more expensive 

Bitcoin’s average transaction fee has skyrocketed to $5.83, BitInfoCharts data shows.

The world’s leading cryptocurrency hasn’t been this expensive to send since June 27, 2019,  the day the BTC price reached its 2019 high of nearly $14,000.

Still, Bitcoin’s transaction fees don’t come close to the previous bull run when they peaked at $54.90 on Dec. 21, 2017.

image by bitinfocharts.com

As reported by U.Today, investor Ari Paul believes that high fees are an acceptable trade-off if they come with security and decentralization.  

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Bitcoin Mining Breaks Even at $8,000, Why Rising Hash Rate is a Positive Indicator of Price

The reason behind high fees 

This time, Bitcoin’s fees are on the rise due to the recent 50 percent reduction of the miner’s reward that has significantly slowed down block production. 

This has led to significant mempool congestion, which means that users have to pay more to get their transaction confirmed.

Bitcoin’s mining difficulty is expected to drop more than 5.6 percent after the next adjustment, which will give miners a breather. 

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.

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