LONDON (Bywire News) - As Bitcoin’s price rallies and hash rate drops transaction rates have hit a 28 month high according to CoinDesk.
The mean fee per transaction rose to 0.00086764 BTC (BTC, +1.65%) on Wednesday, the highest since June 2018, according to data source Glass node. In dollar terms, the average transaction fee was $11.66.
Transaction fees have been rising amidst growing network congestion. This tends to come at a time when the Bitcoin price rallies and investors move into the market. That appears to be the case once again as the price of Bitcoin has experienced considerable rises over the past couple of weeks.
When traffic grows for the blockchain it creates delays and a backlog of transactions. As demand outstrips supply, miners increase their revenue by prioritizing with higher fees. This, in turn, forces other users to offer higher fees to avoid long waiting times.
As such fees, as Bitcoin’s pricy rallied from $11,200 to $13,800 in the space of 12 days, it has risen by 573% in the past couple of weeks.
Added to this a slide in bitcoin’s hash rate also appears to have added to congestion and the increase in price. Amid the price rally, the mining power dedicated to approving transactions has declined boosting waiting times and congestion.
(Written by Tom Cropper, Edited by Klaudia Fior)