Bitcoin transaction fees have dropped from $4.40 to $1.80 this year, according to data from YCharts.
Fees recently spiked due to miner outages in China and reached a peak of $62.80 per transaction.
Blackouts in China not only led to the price of Bitcoin plummeting, but also caused China’s global hash rate to plunge from 44% to zero between May and July of this year.
The YCharts data illustrates the journey of Bitcoin’s transaction fees from the beginning of the year to now, with explanations offered as to what’s caused the consistent decline of the Bitcoin fees.
The establishment of the Bitcoin Lightning Network is perhaps the biggest explanation due to the mass growth it has experienced recently.
The network allows for transactions off the blockchain – known as ‘off-chain transactions’ – which are designed to speed them up and allow for more transactions to be completed via the on-chain network.
According to Arcane Research’s new report, the fast payment system will be used by more than 700m people by 2030.
Another explanation for the decrease in transaction fees is the decongestion of the mempool.
The mempool is where valid transactions wait to be collected by the Bitcoin network and the congestion of the space causes customers to pay more money in order for their transaction to not get stuck in the mempool.
The size of the mempool has been on a downward spiral since the middle of the year allowing customers to not be forced to exit the and not spend additional funds.