Bitcoin fees are known to rise and fall sporadically. However, over the past week we’ve seen an unusual spike in fees, reaching heights of more than $30. As the #1 crypto payment processor, we know how frustrating fees can be - so we’re shedding some light onto these recent shifts and sharing advice on how to save on fees.
Reminder: BitPay is not in control of miner fees. Transaction fees go to network miners to confirm payments and secure the network.
BRC-20 tokens and Ordinals are causing congestion and fee spikes
The most likely cause of fee spikes is minting of new BRC-20 tokens, Bitcoin-based tokens akin ERC-20 tokens. A slew of memecoins, like Ordi and Pepe, are being issued in droves. Along with these coins, users are creating “Ordinals”, images, videos or text engraved onto a single Satoshi (sat) – think of them like NFTs but on the Bitcoin network.
The rush of ordinals and memecoins have flooded the mempool with a backlog of unconfirmed transactions that are waiting to be processed alongside traditional Bitcoin-based transactions. You can track mempool size to get an idea of congestion and fee levels associated with the transactions.
How you can save on BTC transaction fees
Patience: Transaction fees spike in times of extreme network congestion. Timing your transactions for low-use times will result in lower transaction fees. Generally blockchain networks tend to be busiest during hours when people in the U.S. are awake. Wait for off-peak hours if you need to save on transaction fees.
Layer-2: Use a Layer-2 solution to make quick, low fee payments. BitPay supports payments made over the Bitcoin Lightning Network.
Alternative networks: If possible, utilize another network that isn’t experiencing surges. BitPay supports 16+ cryptocurrencies, including popular alternatives like Litecoin (LTC), Ethereum (ETH), Bitcoin Cash (BCH), Dogecoin (DOGE) and Polygon (MATIC).
Pay from a custody wallet: Did you know you can pay BitPay invoices from your custody wallet account like Coinbase or Kraken? Utilizing Coinbase + BitPay means your payments are processed off-chain and aren’t subject to as high of fees.
Wait for off-peak hours if you need to save on transaction fees. Layer-2: Use a Layer-2 solution to make quick, low fee payments. BitPay
BitPay
About Us. BitPay was founded in 2011, while Bitcoin was still in its infancy. We saw the potential for bitcoin to revolutionize the financial industry. We are currently the largest bitcoin payment processor in the world, serving businesses on 6 continents.
Bitcoin transaction costs only depend on how big in bytes your transaction is. The more inputs and outputs you have, the more expensive your bitcoin fee will be. A simple transaction usually costs around 200-2,000 sats or $0.06-$0.60 USD. You can also pay virtually zero transaction fees by using the Lightning Network.
Opt for Off-Chain Sends: On platforms like Coinbase, if you're transferring within the platform and the recipient has opted into Instant sends, you can use off-chain sends, which are instant and free. You can also use the Lightning Network (LN) to make Bitcoin payments at almost no cost.
Data space in each new Bitcoin block is limited, so generally speaking, the more transaction Bitcoin miners have to process for the network, the higher the fees — as one goes, so does the other.
Trade Less Often. One thing that transaction fees and bid/ask spreads have in common is that the more often you trade, the bigger an impact they'll can have on your final return. ...
Using the Lightning Network is a faster and cheaper way to send and receive bitcoin transactions. There are typically little to no fees involved, and it's used to send smaller amounts of bitcoin.
You can time your Bitcoin transactions to ensure you're not trading during peak periods with high traffic volume. Usually, the most active hours are between 8 a.m. and 4 p.m., so to lower your fees, consider trading during less busy hours or at night. You can also try batching your transactions.
If you're a Coinbase customer, you can also send crypto to any email address in 100+ countries instantly and for free. Just open your Coinbase app, select the crypto and an amount, enter the recipient's email address, and hit send.
Bitcoin Average Transaction Fee is at a current level of 4.42, down from 4.696 yesterday and down from 9.620 one year ago. This is a change of -5.88% from yesterday and -54.05% from one year ago.
Several factors can contribute to blockchain network congestion. High transaction volumes, increased adoption of blockchain technologies, and events like token launches can strain the system and cause congestion.
A cryptocurrency network fee, also known as a transaction fee, is a small amount of cryptocurrency paid to incentivize miners/validators to include the transaction in the next block of the blockchain. The fee amount can vary based on the congestion of the network and the size of the transaction.
Lykke offers an all-in-one free crypto trading platform with zero trading fees and low buy-sell spreads. We cover your fiat deposit and withdrawal fees, enabling you to trade crypto for free on Lykke. Enjoy solid liquidity, low spreads, and top-notch security with KYC and AML compliance standards.
If you have sent a transaction that is taking a long time to confirm, you can speed it up by using our increase fee feature. This resends your unconfirmed transaction with a higher fee. Bitcoin miners prioritize transactions with higher fees when selecting transactions to include in a block.
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