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Bitcoin network about to charge its billionth-dollar in transaction fees Bitcoin network about to charge its billionth-dollar in transaction fees

Bitcoin network about to charge its billionth-dollar in transaction fees

The Bitcoin network is approaching its billionth dollar charged in cumulative transaction feesโ€”a threshold due to be broken nearly 10 years after the creation of the original cryptocurrency.

Bitcoin network about to charge its billionth-dollar in transaction fees

Cover art/illustration via CryptoSlate

The Bitcoin network is approaching its billionth dollar charged in cumulative transaction feesโ€”a threshold due to be broken nearly 10 years after the creation of the original cryptocurrency.

The revelation came in a tweet Tuesday by Nic Carter, who expects the network will surpass $1 billion in total cumulative fees this fall based on data obtained from CoinMetrics Network Data Pro.

As of July 28th, the Bitcoin network had amassed $955,797,817 in cumulative fees from more than 439 million transactions, having facilitated the transfer of approximately $1.9T worth of BTC since the original 2009 genesis block.

Bitcoinโ€™s billion-dollar benchmark

To many, the milestone will come as a definitive indicator of Bitcoinโ€™s continued adoption as a peer-to-peer electronic payments system and a compelling blow to the age-old criticism that the network is doomed by the cost of its transactions.

Bitcoin fees, security, and adoption have improved since the last bull market
Related: Bitcoin fees, security, and adoption have improved since the last bull market

Bitcoin transaction fees have in fact declined convincingly since their peak of $55.16 during 2017โ€™s bull marketโ€”a statistic later weaponized by prominent crypto skeptic Nouriel Roubini in his characterization of Bitcoin as a Ponzi scheme.

This narrative appears have lost clout after incremental reductions in feesโ€”most probably on account of increased adoption in scaling solutions such as Segregated Witness (SegWit)โ€”as well as the significant base layer volumes transmitted via BTC, which last year at $1.3T outstripped that of PayPal.

Fees: low or high, depending on the yardstick

Now, BTC proponents tend to hold up the relatively low costs of large BTC transfers as a victory over the coinโ€™s supposed competitors.

Wednesdayโ€™s inordinately large BTC transfer of nearly $1.3B, for example, consumed $1321 in transaction fees, where if it had been sent via TransferWise in $1M lots (the maximum volume allowance per transaction) the same $1.3B sum would have cost roughly $4.7M to send.

Yet when it comes to Bitcoinโ€™s utility for micropaymentsโ€”a subject that has for years divided cryptocurrency advocates over the coinโ€™s intended utilityโ€”current average fees have been known to pose a barrier to mass adoption.

At $1.79 per transaction charged at the time of press, Bitcoinโ€™s average fee would be a considerable deterrent to using BTC for small, mundane payments.

Much hope has been placed in the Lightning Network as a means of reducing fees, however, despite steady growth, the second-layer scaling solution currently processes less than 0.1% of BTC transactions in terms of estimated daily transaction value in USD.

BTC Lightning Network Capacity
Bitcoin Lightning Network Capacity (Source: BitcoinVisuals.com)
Posted In: , Adoption