The consequences of surprising and almost ideological disagreements among Bitcoin node operators were resolved in the favor of the average user.
For the first time in years, the lowest Bitcoin (BTC) transaction fee is only 1/10 of one Satoshi per virtual byte (VBYTE).
This decline is good news for everyday users of the network, but it is concerning miners’ revenues and Bitcoin’s long-term security budget.
Today, many blocks pay half their trading fees for the median level just a month ago. Furthermore, a significant proportion of blocks within the past few days are only partially full. This means that even these new infinite rates don’t attract enough transactions to fill every block.
1/100 million bitcoin
For the majority of Bitcoin Core’s existence, developers of this node software package defaulted to at least one Satoshi (equivalent to 1/100 million in BTC) for transactions for which transactions enter a popular memory pool (MEMPOOL) where transactions choose transactions for blockchain inclusion.
However, as companies inserted commercial interests into these Mempool policy-making debates, core developers began advocating for relaxing Mempool’s storage limits on data that is not only related to the 1-Satoshi floor, but also to the BTC’s on-chain movement.
Both initiatives won over conservative opposition.
By early June, the core developers had announced unprecedented data storage easements for any media, code, and commercial inscriptions.
By mid-July, BTC mining pool operators have also begun to cut minimum rates Satoshi’s 1 to 1/10 to 90%.
Read more: fixthefilters: Bitcoin arguments become more viral than relaxing core data storage
The pie was supposed to grow
Champions of these initiatives believed that these two easements welcomed new users into the Bitcoin network. The idea was to grow the pie itself, even if the miner pie slices shrink.
The goal was everything: more users, more transactions, more data, more fees.
Instead, activity levels were barely introduced. The only thing that changed into meaning – downwards – was the transaction fee.
When more pool operators and node operators change Bitcoin’s core software and accept a fee of 90% lower than one Satoshi, the chart of the percentage of miner revenue from BTC fees is It has dropped to the lowest level since 2022: 0.6%.
Fortunately, Bitcoin block-by-block hardcoding coinbase rewards – paid separately from user-controlled transaction fees – continue to pay miners a majority of their revenue. Yesterday, I actually paid 99.4% of the miners’ revenue.
Of course, this Coinbase is halved every four years, so with Bitcoin’s long-term security, it ultimately makes permanently low transaction fees unsustainable.
