The state of the Bitcoin network is strong. Not only is transaction volume nearing its all-time high, but fees have dropped off substantially. It seems like SegWit and batching are paying off.
Bitcoin’s confirmed transactions per day are approaching their all-time high. With over 400,000 transactions a day through much of December, we are now approaching those same levels going into May.
However, fees have been dropping. They are currently at around $1 per transaction.
Transactions / day approaching ATH (~400,000 per day ). Last time we had this, fees were 500-700 sat / byte. Today, fees are 15-30 sat/byte.#Segwit worked.
Lightning worked.#Bitcoin scaled. ✔️
— A v B (@ArminVanBitcoin) May 4, 2019
Nonetheless, 400,000 daily transactions is marginal if the flagship cryptocurrency seeks to become globally usable on a mass scale. However, the currently low fees and high transactional output indicates progress.
It appears that there are two primary factors contributing to the drop in transaction fees:
- SegWit has now been implemented across the board by most major cryptocurrency exchanges and wallets. The soft fork was implemented in 2017 but took some time to catch on. Enabling a slight increase in the number of transactions possible per block, SegWit has significantly reduced fees.
- Batching has also become more popular on the Bitcoin network. According to an analysis published in 2017, cryptocurrency exchanges like Binance, Kraken and Shapeshift, among others, have all adopted batching to reduce fees. Coinbase also expects to begin batching transactions sometime in the near future.
It could be argued that the Bitcoin fundamentals have never been stronger. With over 35M Bitcoin wallets (2.5x increase in just two years) and the cost-per-transaction dropping by 60% in the past twelve months, Bitcoin is more accessible than ever before.
Although Bitcoin does’t ready for mass adoption quite yet, decreasing fees coupled with increasing transactions are good signs for the future.
Do you believe Bitcoin’s fundamentals are improving? Let us know your thoughts below.
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