I’ve been tracking Bitcoin fees for a while, and I’ve noticed they can change a lot; sometimes under $2, other times over $20 for the same transaction.
I discovered there are several reasons why this would happen:
Network Congestion: Bitcoin blocks are limited to about 1MB, meaning only a few thousand transactions can be processed every 10 minutes. When demand exceeds capacity, users bid higher fees to get priority. During bull runs or major news events, this gets intense.
Limited Block Space: The 1MB block size is a fundamental constraint. If 10,000 people want to send Bitcoin in the next block but only 3,000 transactions fit, the highest-paying 3,000 get in. Everyone else waits or raises their fee.
Ordinals and Inscriptions: Since 2023, people have been storing Non Fungible Tokens (NFTs) and data directly on Bitcoin’s blockchain using Ordinals and Runes. These transactions are much larger than regular payments, eating up block space and pushing out standard transfers.
Bitcoin Halvings The 2024 halving cut miner rewards in half. To compensate, miners now prioritize higher-fee transactions even more. This structural change means fees may trend higher over time.
Transaction Size: Fees are not based on how much BTC you’re sending. They’re based on transaction size in bytes. If your Bitcoin came from many small inputs, your transaction will be larger and cost more.
Has anyone successfully used any strategies to lower BTC transaction fees? I’m particularly curious about real-world experiences for everyday transactions.
