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Bitcoin Average Transaction Fees Are Skyrocketing

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  • Bitcoin transaction fees and mining difficulty has surged to create new all-time highs
  • The hash rate of the BTC has plunged by more than 25%, which is affecting the transactions
  • The reason behind the soaring fees and difficulties is the slow production of BTC blocks

Bitcoin has already achieved mainstream adoption globally. With more adoption, the mining difficulty of the coin has also surged to create a new all-time high. It is known that the reason behind soaring difficulty is the slow production of blocks by the Chinese miners. In contrast, the demand for block space is at an all-time high. According to the data from BitInfoCharts, the average BTC mining fee is approximately more than $60. Whereas, in the last bull market, the transaction was observed tapping the level of $50.

Source: BitInfoCharts

Bitcoin transaction cost is soaring

Bitcoin transaction cost and mining difficulty are soaring to create new all-time highs. The high fees coincide with a range of accidents at Chinese coal mines. Such accidents have taken mining farms in the coal-rich regions of the country offline. 

On the other side, MiningPoolStats revealed that the hash rate of BTC had been observed plunged by more than 25% to 126.84 exahashes per second (EH/s). Following the scenario, Thomas Heller, the Compass Mining Chief Business Officer, commented that the sudden drop in hash rate is due to a combination of issues. Such issues include the shortage of ASIC chips that are used for mining and the increment in outpacing difficulty. Hence the factors are resulting in high transaction cost per block.

BTC mining difficulty is affecting the transactions

Bitcoin hash rate has plunged by more than a quarter, and the mining difficulty has achieved a new all-time high. The blocks are being mined slowly and with scattered speed. In comparison, multiple blocks are taking more than an hour to be mined. However, with such pace, the mining difficulty of the flagship cryptocurrency will adjust in the first few days of May. And such a self-correcting score manages how challenging or handy it is for miners to find the next block in the blockchain.

Will BTC be able to adjust its difficulty?

Bitcoin can adjust its mining difficulty by 25% in each retargeting period. However, currently, the coin is due for a 30% adjustment to correct for the drop in hash rate. Hence, such adjustments would imply more than one downside adjustment ahead. Only one way is there to control the severity of the correction. And that can be maintained if the offline miners come online before the next adjustment period.

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