While the number of Bitcoin transactions that can fit in a block remains the same, demand on the network is leading to rising transaction costs.
The number of transactions waiting to be confirmed in the Bitcoin mempool surged briefly above 125,000 today. This represents the equivalent of roughly 149 megabytes worth of data waiting to be added to the blockchain, which is enough to fill at least 107 upcoming blocks.
Although smaller than the spike that saw a 143,000+ transaction backlog on Dec. 17, 2020, the increasingly cluttered mempool is emboldening Bitcoin’s critics while providing forks with talking points about the speed and cost of cryptocurrency transactions.
Over past 3 months, the daily average Bitcoin transaction fee has varied between $2.18 and $17.20; makes buying a coffee (or any other consumer purchase) with Bitcoin very expensive ~
— D.A. Nygaard (@Danofhope) February 9, 2021
The mempool is commonly referred to as the “waiting area” for incoming transactions before they are confirmed, verified independently by each node connected to the network.
The last time the mempool cleared to zero was on Jan. 1 of this year. Even before then, mempool clearances were already becoming a rare occurrence.
So unless you are purchasing something more than $800…..its cheaper to use a credit card at 2% fee pic.twitter.com/I927LIb8C8
— LiveMarketChat (@LiveMarketChat) February 9, 2021
According to Bitcoin network stats trackers at mempool.observer, a fee of at least 93 sat/byte is currently recommended to assure a transaction is included in the upcoming block. At a reference price of $46,280 for BTC and a median size of 224 bytes per transaction, this results in a transaction fee of $9.63.
Earlier today, the recommended fee for next block inclusion climbed to 141.9 sat/byte, according to a similar, Twitter-based service for monitoring fees on the Bitcoin network.
When you learn the hard way lowballing sat/byte fees. I sent a large transaction RIGHT before mempool exploded. Say some prayers for my MIA satoshis that they find their way home safely some day.. #Bitcoin pic.twitter.com/Q0fmWwWjVr
— ☣️BTC Bap☣️ (@BTCBap) February 9, 2021
On Feb. 8, a total of 84.72 BTC was collected in transaction fees, which equates to $2.05M in miner revenue. Transaction fees had remained quite reasonable through most of Nov. and Dec. 2020, even after a sweeping bull market pushed prices above the previous all-time highs.
Bitcoin’s premier second layer scaling solution, the Lightning Network, is also witnessing record highs, in participating node count and dollar value of cumulative BTC capacity across all channels.
On Feb. 2, mega exchange OKEx announced plans to integrate Lightning into their exchange processes, serving to save itself money in transaction fee costs while also un-burdening the mempool from their transaction demand.