Bitcoin payouts hit 20-month high as mining revenues match $69K BTC price.
Bitcoin (BTC) on-chain transaction fees are distributing the cost of sending BTC skyrocketing.
Statistics data source BitInfoCharts puts the average transaction fee at $40 as of December 17th.
Commentators: High Bitcoin Fees Are Inevitable.
The latest Bitcoin Ordinals article has resulted in higher transaction fees for all network users – but some believe they are here to stay.
According to BitInfoCharts, it currently costs more than $37 to send BTC on-chain – the highest average number since April 2021.
Additional figures from Mempool.space show that Bitcoin's mempool — the size of the verified on-chain transaction record — is so vast, that there are transactions with even a $2 transaction fee on the chain that doesn't have a priority.
About 350,000 transactions are waiting to be confirmed as of this writing.
As on-chain costs become unaffordable for many small investors, the heated debate continues among Bitcoin proponents.
While many are outraged by the impact on Ordinals fees, prominent Bitcoin figures argue that double-digit transaction costs are a taste of things to come. Those looking to protect themselves should embrace Layer-2 solutions, such as Lightning Networks, which are specifically designed to meet mass adoption.
Fees are artificially and temporarily high due to JPEG clownery, but they are no more than indicative of the future. Scaling doesn't happen on L1,” wrote popular analyst Hodlonaut on December 16 in one of many posts on the topic on X (formerly Twitter).
Hodlonaut went on to argue that requiring lower fees for “level 1” transactions “is not only ignorant, but an attack on bitcoin.”
This reflects Bitcoin's composition as a proof-of-work of a competitive network gaining value over time. Lowering fees is counterintuitive, and hard forks of the Bitcoin network meant to provide that benefit don't attract value.
“Why is it important for anyone to get into L1 at a sub-$1 payment if they can't afford to move their money in five years? Go to bash or some other centralized pipe dream already,” Hodlonaut added, referring to one such outlier, Bitcoin Cash (BCH).
Miners will earn the best US dollar in two years
Elsewhere, popular analyst Beautyon says Bitcoin continues to perform as intended despite the fees.
Related: Navigating and profiting from this bull market can be harder than it seems.
“If Ordinals brings everyone higher up in the on-chain world than expected, it will act as a scythe for everyone who hasn't adopted a Layer 2 solution to the network payment problem,” said part of a recent X post.
“Many users will be confused, frustrated and ready to give up Bitcoin. They will have no return for them, it is clear, because there is no one to blame, no one to seek reparation; After all, this is the normal state of the network. They're following the rules, and they're the rules you agreed to, you bored monkeys!”
That view is shared by Bitcoin veteran Adam Back, founder of Bitcoin and blockchain technology company Blockstream.
For him, the answer also lies in expanding layer-2 capabilities rather than relying on anything more than miner payment incentives.
“JPEGs can't stop at bitcoin,” he concluded.
“Complaining makes them do more. Try to stop them and they will do it in the worst way. The high fees will force Layer 2 adoption and innovation. So relax and build things.
Data from Blockchain.com shows miners' earnings – total subsidies and fees in US dollars – peaked when bitcoin hit its current all-time high of $69,000 in November 2021.
BTC/USD traded around $42,000 at the weekly close of December 17, according to data from Cointelegraph Markets Pro and TradingView.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
