Against the background of the bitcoin price growth to $11,000, there was also a sharp jump in the level of transaction commissions through the bitcoin blockchain. They grew more than six-fold in a month.
Following the rise in price, which briefly exceeded $11,000 this week, transaction fees in the bitcoin network also rose sharply. Over the past month, the average cost of a transaction on the bitcoin network grew by more than 525%.
The average bitcoin transaction fee is currently $5.80, according to Bitinfocharts. In the last three days alone, commissions doubled.
The level of transaction fees in the bitcoin network is dynamic and responsive to demand from users. The higher the demand for using the network, the higher the fees. The current growth in transaction fees was triggered by the bitcoin price rally and actions of traders who actively use the possibilities of arbitrage trading and prefered to transfer funds between various accounts on different exchanges.
On July 24, bitcoin mempool reached 80 megabytes, forming a queue of transactions to be included in blocks. In this case, those who want to complete the transfer faster can agree to a higher fee so that miners process their transactions faster.
In May, after the halving, when the reward to bitcoin miners halved, the average transaction fee on the network reached a two-year high, rising to $6.6, but later fees fell again.
As Decrypt notes, transaction fees on bitcoin's closest competitor, Ethereum, have also surged, rising 180% this month, reaching $1.4. This had a negative impact on the Decentralized Finance (DeFi) industry. Due to higher transaction fees, DeFi applications like Compound and Uniswap are becoming much more expensive to use.