Bitcoin fees hit 20-month high as miner revenues match $69K BTC price

Bitcoin on-chain transaction fees are dividing opinion as the cost of sending BTC skyrockets.

Data from the statistics resource BitInfoCharts puts the average transaction fee at nearly $40 as of Dec. 17.

Commentators: High Bitcoin fees are inevitable

The latest wave of Bitcoin Ordinals inscriptions has resulted in elevated transaction fees for all network users — but some believe that they are here to stay.

Per BitInfoCharts, it currently costs just over $37 to send BTC on-chain — the highest average figure since April 2021.

Additional figures from Mempool.space show that Bitcoin’s mempool — the size of the unconfirmed on-chain transaction backlog — is vast, resulting in transactions with an attached fee of even $2 having no on-chain priority.

Almost 350,000 transactions are waiting to be confirmed at the time of writing.

As casual on-chain spending becomes unviable for many smaller investors, a heated debate among Bitcoin proponents continues.

While many are angry at the impact of Ordinals on fees, popular Bitcoin figures argue that double-digit transaction costs are merely a taste of things to come. Those wanting to shield themselves need to embrace so-called layer-2 solutions such as the Lightning Network, which is specifically designed to cater to mass adoption.

“Fees are currently artificially and temporarily high due to JPEG clownery, but it is nothing more than a glimpse into the future. Scaling doesn’t happen on L1,” popular commentator Hodlonaut wrote in one of many posts on the topic on X (formerly Twitter) on Dec. 16.

Continuing, Hodlonaut argued that demanding low fees for “Level 1” transactions is “not just ignorant, it feeds into an attack on bitcoin.”

This reflects on the very composition of Bitcoin itself as a competition-based network gaining value over time as proof-of-work intends. Keeping fees low is contradictory, and as hard forks of the Bitcoin network specifically intended to offer that benefit have shown, does not attract value.

“Why is it critical to onboard someone to L1 with sub $1 fees, if they can’t afford to move the funds in five years anyway? Go to bcash or another centralized pipe dream already,” Hodlonaut added, referring to one such offshoot, Bitcoin Cash.

Miners enjoy best USD revenues in two years

Elsewhere, well-known commentator Beautyon reiterated that despite the fees, Bitcoin continues to function as intended.

“If Ordinals bring the high on chain world to everyone earlier than expected, it will act like a scythe cutting down everyone who did not accept a Layer 2 solution to the network fee problem,” part of a recent X post stated.

“Many users will be confused, upset and ready to abandon Bitcoin. There will be no recourse for them, obviously, because there is no one to blame, no one to seek compensation from; after all this is the normal state of the network. The rules are being followed, and those are the rules you agreed to, Bored Apes!”

That perspective is shared by Bitcoin veteran Adam Back, co-founder of Bitcoin and blockchain technology firm Blockstream.

For him, the answer likewise lies in expanding layer-2 capabilities instead of relying on anything beyond miner fee incentives.

“You can’t stop JPEGs on bitcoin,” he concluded.

“Complaining will only make them do it more. Trying to stop them and they’ll do it in worse ways. The high fees drive adoption of layer2 and force innovation. So relax and build things.”

Data from Blockchain.com shows miners’ revenue — the sum total of block subsidies and fees in USD — hitting levels last seen when Bitcoin hit its current $69,000 all-time high in November 2021.

Source: https://cointelegraph.com/news/bitcoin-fees-20-month-high-miner-revenues-match-69k-btc-price