Bitcoin Transaction Fee Soars 50% in 24hrs

The overall fee paid for on-chain Bitcoin (BTC) transactions in the past 24 hours rose by more than 50% since yesterday.

On-chain info analytics service, Glassnode, highlighted numerous key improvements indicated by Bitcoin’s blockchain info.

As per the firm, overall Bitcoin fee spent in the past 24 hours rose by 50.7% to roughly $9,500. Additionally, the Bitcoin mean fee spent by users rose by 58.8% to $0.78.

Meni Rosenfeld, Chairman of the Israeli Bitcoin Association, opined that judgment on Bitcoin fee cannot be made purely by monitoring for only 24 hours.

He underlined that historic info indicates that Bitcoin transaction fee changes is more volatile thant the numero uno cryptocurrency itself.

Nevertheless, there are possibilities for the trend to strengthen, according to Rosenfeld.

“If the trend continues, a mild increase in fees can be a positive sign. It means people are actually willing to pay those fees — in other words, Bitcoin is increasing in popularity and usage. This can correlate with increases in the Bitcoin price and adoption. If the fees rise too much, though, it’s not a healthy sign. It would mean that the technical infrastructure of Bitcoin is failing to scale, making it more difficult for people to benefit from Bitcoin, and stifling Bitcoin’s potential to have a positive impact.“

Rosenfeld also underlined that the amount paid as Bitcoin fee is not the only measure that should be looked at. He pointed out the need to give importance to their volatility as well. He detailed:

“Rapidly changing fees make it harder to plan ahead and make the most out of Bitcoin. There are some technical proposals, such as ‘elastic block caps’ which I’ve been advocating, which seek to address this.”

On-chain transaction fees are anticipated to increase in the long term, as per Rosenfeld. Nevertheless, he underlined that Bitcoin transaction charges may not increase sharply due to the roll out of second-layer tools such as Lightning Network.

“In the long term, the fee for an on-chain transaction should rise, but that doesn’t mean that fee for a Bitcoin payment has to rise. As Bitcoin grows, we will see more reliance on 2nd layer solutions such as the Lightning Network. The fee for each payment on the 2nd layer can be very cheap – but the on-chain transaction which opens a channel will be more valuable, thus more expensive.”

As per Rosenfeld, “there is a delicate balance with regards to the optimal fee level.”

He stated that if fees are extremely low, minder will turn out to be underfunded. On the contrary, if fees are way too high, Bitcoin will not serve the purpose for which it was created. He ended saying:

“Fees are generally low now so an increase can be a positive sign, but if they go too high, we will need to seriously consider new scaling solutions.”

Several traders have a bullish view of Bitcoin as the block reward halving nearsby. Bitoin hodlers are currently increasing their investments by $530 million worth cryptocurrency per day.

In this regard, a Bloomberg report indicates that the numero uno crypto is getting reading for a big rally similar to one seen in 2017.