Bitcoin transaction fees are falling back to Earth.
The average Bitcoin transaction fee soared to $127 Friday amid the quadrennial halving event and launch of Runes, according to data from Blockchain.com.
In total, the first Bitcoin block after Bitcoin’s Friday halving included 37.6 BTC or $2.4 million in fees, according to data from mempool.space.
The average Bitcoin transaction fee settled to levels on Sunday that matched costs seen in December, however.
Per Blockchain.com, the average Bitcoin transaction fee had fallen 74% from the day prior on Sunday to $34—a steep drop-off as congestion on Bitcoin’s network faded.
Bitcoin transaction fees are dolled out to miners as part of their reward for verifying trasactions and including them in new blocks added to Bitcoin’s blockchain.
By paying a higher fee, a Bitcoin user can incentivize miners to include the transaction in a block more quickly.
Bitcoin transaction fees clocked in at $81 million post-halving, representing 75% of rewards that miners earned on Saturday, according to a Dune dashboard from investment firm 21Shares.
The cost of a Bitcoin transaction is gradually decreasing.
This past weekend, there was a period of time when using the Bitcoin network was more expensive than it had ever been. A protocol for meme coins based on Bitcoin was introduced, and rewards for miners were cut in half, all of which coincided with the higher costs for users in an extremely active market.
As a result of the quadrennial halving event and the release of Runes, the average Bitcoin transaction fee increased to $127 on Friday, per data from Blockchain.com. Despite the fact that fees were at a record high, the metric may have been distorted by a few expensive, urgent transactions.
For instance, to be included in the first block of the new Bitcoin era, a user had to pay a transaction fee of almost 8 BTC, or $510,000. According to data from mempool, the first Bitcoin block following the Friday halving contained 37.6 BTC, or $2.4 million, in fees. distance.
Runes, which Casey Rodarmor, the creator of Ordinals, released on Friday, enables the creation of fungible coins on Bitcoin. Runes caused Bitcoin users to pay 312 BTC (or $20 million) in fees as of this writing, according to Rune Alpha, following an initial rush by daring cryptocurrency enthusiasts to mint tokens. That bonus came as miners adapted to the new digital scarcity of Bitcoin.
But on Sunday, the average Bitcoin transaction fee reached levels that were comparable to those observed in December. The average transaction fee for Bitcoin dropped sharply to $34 on Sunday, according to Blockchain . com, 74 percent lower than the day before as network congestion lessened.
Miners receive Bitcoin transaction fees in exchange for validating transactions and adding them to new blocks that are added to the blockchain. A Bitcoin user can encourage miners to include a transaction in a block faster by paying a higher fee.
The so-called block subsidy associated with Bitcoin, which was lowered to 3 point 125 BTC this past weekend as part of the halving, usually outweighs the rewards that miners receive from fees. But that long-standing pattern was momentarily turned on its head over the weekend.
According to a Dune dashboard from investment firm 21Shares, bitcoin transaction fees post-halving came to $81 million, or 75% of the rewards that miners received on Saturday. The next day, there was a thirty percent reward from fees compared to subsidies.
Thus, it’s possible that Bitcoin’s most recent run-in with exorbitant fees was fleeting. Miners may be questioning if the windfall was a one-time anomaly or a potential source of income in Bitcoin’s fifth epoch, though, given the cryptocurrency’s recently reduced block subsidy.
