BTC Record: $1 Billion Posted in All-Time Transaction Fees for Bitcoin
- Based on the current price of Bitcoin, it is possible that transaction fees are much higher than $1 billion.
- Presently, the total value of one BTC is $9,169.16.
- The bitcoin mining halving is under 200 days away (May 2020).
Bitcoin reaches epic blockchain milestone just one day before its 11th anniversary of Satoshi's whitepaper release in surpassing $1 billion in cumulative transaction fees.
Bitcoin has been around for over a decade, and it has reached many milestones along the way. The cryptocurrency reached $20,000 back at the end of 2017, and it reportedly surpassed Ethereum’s transaction fees recently as well. Now, Bitcoin’s blockchain has reached $1 billion in transaction fees in an all-time high.
Bryan Auld, the founder of the Billfodl wallet for bitcoin, stated,
“This milestone is a really cool milestone just because it shows how much people value block space. And that it’s something people don’t mind paying for, which I think is really important moving forward.”
Based on data collected from BlockChair, transaction fees for Bitcoin have decreased annually for the last few years, based on the scaling solutions that the asset has imposed, like Segregated Witness and the Lightning Network. Despite recording $1 billion in transaction fees, the amount has been converted from BTC with the current value of BTC. With the changing amounts through the years, it is believed that this amount could actually be much higher.
Since 2019, there has been a total of 204,808.3479 BTC that has been passed down to miners in transaction fees. If using the current price of Bitcoin, that means the total amount is $1.86 billion in transaction fees.
It's official. The Bitcoin network has surpassed 1 billion USD in cumulative fee revenue. pic.twitter.com/lKzstEX3eI
— Yassine Elmandjra (@yassineARK) October 30, 2019
In the next few years, the transaction fees recorded for the Bitcoin network will likely increase, especially as the method of rewarding miners evolves. Jameson Lopp, the CTO of the Casa bitcoin management startup, stated,
“Over the long run, the transaction fees will eventually have to replace the block [subsidy]. There’s a reason why it’s called the block subsidy in the code. It’s because it is subsidizing the security of the network.”
Lopp added that the general understanding is that the people who use the network have to replace the subsidy, which is why the transaction fees are charged.
There are three main purposes for the transaction fees on the Bitcoin blockchain, but all of these purposes go back to ensuring the censorship resistance and integrity of the Bitcoin network. The first purpose is to discourage users from to implemented denial of service, or spam, attacks, which ultimately slow the network’s speed.
“When you create a transaction, you’re able to use bandwidth and write data onto the hard drive of anyone running code on the network. If there’s no cost to doing that, then you can saturate everyone’s bandwidth and fill up everyone’s hard drive.”
The second purpose is to create priority over which transactions are confirmed to be written over others. Daniel Steinberg, the VP of the Navier consultancy firm, elaborated, saying,
“It’s very simple: you pay more, you get your transaction accepted more quickly. So that mechanism is a fair way to participate in a pending transaction pool.”
The transaction fees, as their third purpose, ensure that the transaction is complete. The transaction fees serve as incentive to miners to ensure that they continue to post to the blockchain. Without this kind of incentive, there’s a chance that the miners could be swayed by bribes from bad actors. Pierre Rochard, the founder of Bitcoin Advisory, remarked,
“In aggregate, the transaction fees plus the block subsidy provide for the probabilistic transaction finality of the bitcoin system. The greater this finality is, the less time transactors have to wait before having confidence that the transaction will not be censored of double-spent.”
Auld believes that there is still another 10 to 13 years before the amount drops to a “negligible” level.
Bitcoin Mining Halving Countdown Update
The days left until the 2020 bitcoin halving is now under 200 by most experts account of when the block height reaches #630,000. The third scheduled of thirty three BTC blockchain halvenings will happen sometime in May, roughly a little six months away from now when the block rewards will be cut in half after every 210,000 blocks occur, or every four years. The bitcoin halving block rewards will go from 12.5 BTC to 6.25 BTC, when it started out as 50 BTC (2009-2012) then 25 BTC (2013-2016). The latest cycle from 2016-2020 has been producing 12.5 BTC per every 10 minute increment and has pushed the total supply of bitcoin over 85% in circulation since January 3, 2009.
It is worth noting that every 10-minute new block creation, the winner of that block also gets the transaction fees as an incentive towards transmutating CPU power and electricity into securing the peer to peer bitcoin banking ledger. Now that the cumulative bitcoin transaction fees have tallied over $1 billion dollars since its inception, maybe those who think the cost of electricity and computer power that create the bitcoin mining network is too wasteful or non-sustainable may not be factoring in the ecosystem's strength and security growing as small feats like this keep piling up just a decade in.
At the time of writing, Bitcoin is valued at $9,169.16, losing 2.28% in the last 24 hours.