Bitcoin and Ethereum transaction fees sink 95% as network activity reduces
The fees on Bitcoin and Ethereum blockchains are on rapid decline, as evidenced by a 93%–95% reduction in average transaction fees over the past couple of months.
The fees are paid to the miners who process transactions on a typical proof-of-work (PoW) blockchain. The transaction fee depends on the size of the transaction in bytes and how many transactions a coin has gone through in the past.
The average transaction fee of Bitcoin hit $62.77 on April 24, a figure that exceeded the $55 all-time high from December 2017.
By this Sunday, fees had fallen to $4.38 with marking a 93% reduction and sent Bitcoin’s average fee back to levels not seen since December 2020, prior to 2021’s market pump.
The same goes with Ethereum, where average transaction fees rose as high as $69.92 on May 12. That was another all-time high for the cost of using Ethereum and was undoubtedly fuelled in part by the flurry of activity that accompanied the launch of DeFi and the Uniswap exchange. Ethereum’s average fees on Sunday were as low as $3.44, amounting to a 95% reduction.
Apparently, fees on both blockchains tend to jump whenever the cryptocurrency spikes suddenly or a new application that increases network usage. The number of transactions on both Bitcoin and Ethereum is also on the decline.