Bitcoin Transaction Fees Significantly Decrease, Charlie Shrem Pays $0.25 Fee
Over the past few weeks, the size of the Bitcoin mempool, the holding area for unconfirmed transactions waiting to be picked up by miners, significantly decreased by around 90 percent. As a result, Bitcoin fees significantly declined and the recommended Bitcoin transaction fee calculated by Bitcoin fee estimators integrated into widely utilized wallet platforms such as Blockchain substantially dropped. Now, fees below $1 have become sufficient to obtain first confirmation within 10 minutes. In fact, Blockchain’s newly deployed Bitcoin fee estimator, which has received praise from the community for utilizing a satoshis per byte basis to establish recommended fees for users more accurately, has been recommending a $0.19 fee for regular transactions with an estimated confirmation time of one hour. On June 29, Bitcoin pioneer and cryptocurrency wallet platform operator Jaxx COO Charlie Shrem revealed that a personal $2,000 Bitcoin transaction was confirmed within the first six minutes with a $0.25 fee.
Why did fees become cheaper?
In late May, the size of the Bitcoin mempool reached an all-time high at around 120 GB. The large pool of unconfirmed transactions within the network led to the congestion of the entire Bitcoin Blockchain and the delay of transactions that had attached appropriate and proportional fees. For over a month from May 1 to June 15, the Bitcoin mempool remained unreasonably large as the mempool failed to clear transactions during the weekend. Previously, the Bitcoin mempool had always cleared the majority of its unconfirmed transactions during the weekend when substantially fewer transactions were being settled on the Bitcoin Blockchain. However, the failure to clear transactions during relatively inactive periods led the Bitcoin mempool to expand and store even more transactions. Abruptly, the size of the mempool decreased within a matter of weeks and within 21 days starting early June, the size of the mempool declined from 120 GB to 20 GB. On May 12, Cointelegraph reported that the activation of a viable scaling solution is urgently needed due to the abnormally large size of the Bitcoin mempool. Several analysts including Bitcoin researcher Ben Verret suggested that the sudden decline in the size of the Bitcoin mempool is a direct result of the termination of network spam and that because the activation of segregated witness (SegWit) is getting closer, spam transactions have stopped targeting the Bitcoin Blockchain.