The average transaction fee on the Bitcoin network has reached its highest since June 2018, amid a record-high number of unconfirmed transactions and a decrease in the hashrate.
According to Glassnode, on October 28, the average transaction fee on the Bitcoin network was 0.00086764 BTC ($11.66), which was the highest since June 2018. The average BTC transaction fee has increased by 573% over the past two weeks, while the price of the cryptocurrency has increased from $11,200 to $13,800.
“The Bitcoin mempool is back in the spotlight after an increase in transaction volumes, causing network congestion and, as a result, an increase in fees,” said Denis Vinokurov, head of research at London-based brokerage Bequant.
Mempool is a queue of unconfirmed transactions on the network. When user activity increases, this leads to an increase in the size of the mempool. As demand exceeds supply, miners increase their revenue by prioritizing transactions with higher fees. This, in turn, forces other users to offer higher fees to avoid long waiting times.
In the middle of the week, the increase in the activity of Bitcoin users led to an increase in the number of unconfirmed transactions to 131,068. The last time such a value was recorded in December 2017.
The recent decline in the Bitcoin hashrate against the backdrop of the end of the rainy season in the Chinese province of Sichuan also played a role in the growth of the queue of unconfirmed transactions and commissions. Hashing power has declined on the back of rising prices, leading to increased transaction confirmation waiting times and network congestion. Analysts expect that with the next recalculation, the complexity of bitcoin mining will significantly decrease.