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Runes impact fading: Bitcoin transaction fees plummet to 5-Year Low

TL;DR

  • Bitcoin’s transaction fees hit a 5-year low despite the Runes token boom, surprising analysts.
  • Runes activity caused a spike in Bitcoin fees initially, but fees have since dropped sharply.
  • Bitcoin miners stand to benefit from increased Runes activity, unlike Ethereum, which is actively reducing fees.

The transaction fees of Bitcoin have sunk onto the five-year level while still witnessing a sharp decline despite the Runes token standard boom. According to CryptoQuant analyst Julio Moreno, there was a sharp drop in transaction fees in spite of the notable increase in Rune traffic on the 20th of April. Although there were top transactions of over half a million dollars in the amount of fee, the network’s fees plummeted sharply, unlike predicted, seeing the average users’ impediment in the fee.

Source: X

Runner’s analysis emphasized that Bitcoin’s daily average transaction fees, despite still Runes’ fans, were smaller than the high figures seen in late 2017 and early 2018. This reduction occurs at a time when there has been stronger activity of runes similar to the one in demand experienced when the BRC-20 token standard was first introduced last year, which also contributed to the higher network transaction volume.

Runes impact subsiding

At the beginning of Rune’s adoption, the adoption of the latter caused an increase in Bitcoin’s transaction fees, but the impact of this standard is gradually reducing. The comparatively high level of gas fees for the average user is a matter of concern. However, the recent drop in transaction rates could, in fact, be a sign that things are getting better. The network shows its robustness in the face of escalating Runes activity. The former seems to validate a level of stabilization despite fluctuations.

This fact reflects the fact that Bitcoin has, in the past, withstood transaction spikes and fee hikes. The situation at present depicts an equation to be solved between the increased demand for activity on the blockchain and the block’s capacity to handle such tasks without a drastic increase in fee.

Bitcoin miners, with profit in their sight

The Rune transactions activity, which causes the overall concern for the fees at the beginning, is an opportunity for Bitcoin miners. The rise of Runes traffic as a result of its use as a transaction method can be seen as a buffer for miners, especially keeping in mind the recent Bitcoin halving event, which decreased the amount of transaction fees. This role of miners has placed them in a position to make gains from the increased demand while helping to keep the network stable.

Contrastingly, Ethereum‘s development department recently implemented upgrades to decrease transaction fees, while Bitcoin’s core development team has no plan for that. Though Bitcoin’s transactions are increasing, no attempts have yet been made to reduce fees, which communicates another way from Ethereum, which is characterized by constant upgrades.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Mutuma Maxwell

Maxwell especially enjoys penning pieces about blockchain and cryptocurrency. He started his venture into blogging in 2020, later focusing on the world of cryptocurrencies. His life's work is to introduce the concept of decentralization to people worldwide.

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