On Saturday, December 16, 2023, Bitcoin transaction fees peak at $40 per transaction at 1:48 p.m. Eastern Time. The increase in on-chain fees exceeded the peak reached on May 8, 2023, when the average transfer cost exceeded $31 per transfer.
Rising Bitcoin Rates Surpass $40
Bitcoin transaction fees are rising, and at the time of writing, a high-priority transaction hit $40 just before 2 p.m. on Saturday, December 16th. Miners have been charging fees and an example of this is the fact that block height 821,485 came with 7,314 BTC in fees, which is more than the block subsidy size of 6.25 BTC. Currently, the hash price per petahash per second (PH/s) remains at $108 per PH/s per day.
The recent increase in Bitcoin transaction fees to $40 each significantly surpasses the previous 2023 record of $31 per transfer set on May 8. Mempool space data reveals that for high-priority transactions, individuals are spending 674 satoshis per virtual byte (sat/vB). , while for those with lower priority the cost is around 602 sat/vB or US$35.78, as observed on Saturday afternoon.
Notably, some transactions on Saturday exceeded as much as $50 per transfer. There are currently eight unmined blocks, each filled with high-priority transactions. Additionally, 311 blocks are waiting to be processed to resolve the backlog of 383,607 unconfirmed Bitcoin (BTC) transactions in the mempool.
These outstanding blocks, which total more than 531 megabytes (MB) of block space, translate into an estimated settlement time of just over two days and three hours, considering the average block interval of ten minutes. The significant increase in BTC fees on the network has generated a flurry of comments and discussions on social media, with numerous observers weighing in on the situation.
“The average Bitcoin transaction fee is now $50, with 300,000 transactions waiting to be confirmed. This is beyond ridiculous and unusable,” said Nikita Zhavoronkov, lead developer at Blockchair. “Historically, this is the point at which people start fleeing en masse to alternative blockchains.”
Others were quite satisfied with the high rates. “Remember all the [Ethereum] maxis who said Bitcoin had a security budget problem? It’s fixed,” posted Dan Held on X. Others talked about layer two (L2) solutions and whether or not they could alleviate the problem.
“Bitcoin rates surpassed 600 sats/vB today. That’s a 600x increase in 1 year,” said Muneeb Ali, co-creator of Stacks. “And you’re still debating whether developers want to build on top of Bitcoin in the future? “Bitcoin L2s are becoming more critical every day.”
“It will be great to see L2s flourish in a higher rate environment,” Held responded to Stacks executive thread X. “I think bitcoin rates are reaching a tipping point for that to happen,” Ali responded.