Every crypto transaction handled by exchange or conversion platforms is subject to a certain amount of charges. These fees vary from time to time. Considering the recent rise in the price of Bitcoin, it seems that its transaction fees have gone up too.
The transaction fees were costing users about $0.50 mark for each transaction for the last six months. However, the recent data is indicating that the average transaction fees hit the highest level a few days ago. Bitinfocharts provided this data. Now the average transaction fees are around $1 to $2. This price rise in the transaction fees is coincidently occurring at the time when the bitcoin market price is rising too.
Bitcoin fees are charged as every block added to the bitcoin comes with a very restricted room. Most of the blockchains face this situation while fulfilling its aim of giving total control to the users over their money.
When any blockchain platform is getting more users, a user has to be in a race with other users in order to complete the transaction. In short, every transaction doing person/user has to spend money on the miners to incentivize them to conduct the particular transaction process faster and give the particular user a priority over others. As the miners are the one taking care of the completion of the process, the user has to make attractive offers to them. These incentives are given in the form of fees.
But why these fees are getting raised? As the bitcoin block is getting loaded with numbers of transactions, the fees are increasing. With an increase in the number of transactions, the competition is increasing and so does the waiting time. Hence users must be not willing to lose on the profitable transaction just for the sake a rise in fees.
There is never much of a space on the bitcoin blockchain system for the transaction. This helps in keeping the blockchain small which subsequently would enable users to download whole data.
Ruben Somsen said, “As long as more people become interested in bitcoin, fees will inevitably rise.” “Just like bitcoin is limited to 21 million, block space is limited to roughly 15 transactions per second (4MB block weight per 10 minutes),” Somsen added.
He said users and traders must understand that transaction fees are not constant; they keep changing most due to the gap between full and non-full blocks. Full blocks mean higher fees and non-full blocks mean lesser fees.