Cryptocurrency Transaction Fees Spike as Crypto Interest Surges
Summary
- Bitcoin average transaction fees have increased from $0.475 to over $5.16 in less than a month.
- Ethereum average transaction fees have increased from $0.115 to over $0.55 in the same time frame.
Cryptocurrency transaction fees are the cost associated with transferring crypto. Transaction fees are paid to the transaction validators (commonly miners) and rise with network congestion. Bitcoin made headlines during the 2017 bull run when fees spiked past $35 for a single transaction. Ethereum has been a cheaper alternative to Bitcoin with fees commonly many times less.
However, as interest in cryptocurrencies surges, both Bitcoin and Ethereum network fees have been ticking upwards. In less than a month, Bitcoin’s average transaction fee jumped from $0.475 to $5.16 for a single transaction. Ethereum fees have also seen a significant jump from $0.115 to $0.55 per transaction.
Bitcoin
Bitcoin transaction fees pay miners for validating and processing new transactions. Due to Bitcoin’s 10 minute block time, the largest blockchain often experiences congestion issues. As a result, users have to pay a greater fee to outbid other transactions competing to be included in the next block.
Bitcoin has seen a surge in interest and price as the highly-anticipated Bitcoin halving occurred less than a week ago. The increased usage caused Bitcoin fees to skyrocket over 900% in the last month alone.
Ethereum
Ethereum has also seen a drastic fee increase over the last month. Despite featuring a 13 second block time, the second-largest cryptocurrency is not immune to fee increases. In less than a month, fees increased from $0.115 to $0.55, a 350% increase.
The Ethereum blockchain has been consistently operating at over 80% capacity. As adoption increases Ethereum’s network usage will be pushing its limits.
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