Mempool & Bitcoin Fees Holding Steady as BTC Payments Hit New Highs
Bitcoin price has become range-bound around the $36,000 level, and with this lull in the action, the average cost to send BTC is also calming down.
From the 2nd highest average fees level in history at $17.5 on Jan. 12, the fees have decreased to the current $9, as per Blockchair. The highest this fee was during the Dec. 2017 peak of $20,000 at around $60.
Interestingly, despite Bitcoin being on a wild run that saw payments hit an all-time high these past weeks, breaking all the previous bull run records, average fees only went this high. Mempool transaction count, the total number of unconfirmed transactions, was also nowhere near the ATH.
“It's astonishing how well the mempool is holding up and how comparatively low the transaction fees are,” noted Sergej Kotliar, CEO Bitrefill. According to him, when Bitcoin price moons, it is unlikely that fees will reach 2017 levels of bad.
These low fees are the result of segwit, fee estimation, Lightning Network, stablecoins moving to other chains, and of course, most cryptocurrency exchanges implementing payment batching now. And while Coinbase pays top-dollar fees for the next block confirmation, you only pay 1/100th of that because they batch 100 at a time.
This, Kotliar says, points to “an intrinsic aspect of centralization vs. decentralization – centralized solutions at scale are more efficient, decentralization comes at a cost.”
While the network is still cheap with low congestion levels, other metrics have been going for new highs — both hash rate and difficulty of Bitcoin mining are at peak.
In the world of mining, a lot of development has been happening with Mike Novogratz’s Galaxy Digital now officially mining Bitcoin. The company announced the launch of its miner financial services, including lending, investment, and risk management offerings.
The mining branch of the firm, which has been under development since before October, will be led by Amanda Fabiano, former director of mining at Fidelity, who says this will help Galaxy “deeply understand and solve for the financial needs of miners.”
Even the largest exchange in the US, Coinbase’s venture arm, is investing in mining software and services company Titan, which is currently in the beta testing phase. Mining giant Core Scientific is among the clients testing the pool.
Meanwhile, Barry Silbert is working on bringing BTC mining to North America through Foundry, which recently launched an advisory service to help power companies, government entities, and others get involved with Bitcoin mining.
This month, Foundry placed 14,000 Whatsminer MBT units and launched “what will soon become the largest U.S.-based bitcoin mining pool. It is time for bitcoin hashrate to come to the U.S.,” said Silbert, founder, and CEO of Digital Currency Group, the parent company of Grayscale, Genesis, and TradeBlock.