Aug 22, 2022 02:50
After the recent upgrades on Bitcoin Network, Bitcoin’s mining difficulty has recovered and the Bitcoin transaction fees have dropped below $1 for the first time in the last two years.
Besides the lower mining difficulty, the other factors that can be attributed to the drop in the transaction fees include recent Bitcoin upgrades and the falling market prices that have seen Bitcoin BTC/USD prices stay below $24,000 for the better part of 2022.
Transaction fees
The drop in Bitcoin’s transaction fees strengthens Bitcoin’s use case as a viable mainstream financial system especially since high transaction fees discourage users since they eat into users’ funds while transacting. The impact is most felt by users making low-value transactions.
In a nutshell, the transaction fees determine the minimum amount of coins that one can transfer over a specific blockchain network.
Value of transaction fees paid to all miners in form of BTC blockchain.com
As of today, the average Bitcoin transaction fees was about $0.825.
The recent Lightning Network and Taproot upgrades on Bitcoin Network have played a great role in contributing to eh drop in the transaction fees since they are both aimed at fostering cheaper and faster transactions.
Lower mining difficulty
Bitcoin mining has steadily recovered over time mainly due to the availability of cheaper mining hardware. Generally, the market is recovering from a prolonged chip shortage since the Covid-19 hit.
Bitcoin mining difficulty according to blockchain.com
According to blockchain.com as seen from the chart above, BTC’s mining difficulty had dropped to a low of 27.69 trillion at the start of August. The mining difficulty has however recovered to about 28.35 trillion.
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