Yesterday, on the 30th of October 2019, the bitcoin blockchain officially reached $1 billion in cumulative transaction fees.
It's official. The Bitcoin network has surpassed 1 billion USD in cumulative fee revenue. pic.twitter.com/lKzstEX3eI
— Yassine Elmandjra (@yassineARK) October 30, 2019
For many crypto enthusiasts, this is more than a milestone that represents a big number. This is the result of growth, dedication and belief in an idea. More and more people are constantly getting into crypto, despite the high volatility, the negative mass media coverage and the harsh anti-crypto stances of some governments.
Data from the blockchain analytics startup BlockChair, suggests in fact, the amount of bitcoin transaction fees collected annually has decreased over the years. A big reason for that is that there were many scaling solutions like the Lightning Network.
Also, the $1 billion milestone isn’t technically correct. The amount is actually almost double if we take into account the current price of bitcoin. Coin Metrics data suggests that precisely 204808.3479BTC have been given out in transaction fees to miners since 2009. With today’s price, this results in $1.86 billion.
Bitcoin transaction fees have many unique uses
Transaction fees are essential for preserving the integrity and the much-needed censorship-resistance of the network.
Fees act like a pest repellent for service attacks more commonly known as “spam” which slows down the network. Additionally, they are also used to prioritize which transactions get confirmed and written onto blocks faster than others. These fees also guarantee that the transaction is completed.
This combined with the block subsidy, which is reduced by 50% every 4 years, allow transaction fees to incentivize bitcoin miners from stalling or editing the blockchain.
If there was no monetary incentive, there would be far more motivation for miners to be bribed by third parties to unfairly withhold a large portion of transactions.
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Tags:bitcoin censorship resistancebitcoin milestonesbitcoin transaction feesblockchain analyticsblockchair data