The incredible price rally which stormed the market during the closing days of the previous week not only sent Bitcoin prices soaring, but also the fees for its miners. In comparison to other top cryptocurrencies, the king coin blew its competitors out of the water.
According to a report based on Messari.io’s OnChain FX rankings by the cryptocurrency analytics firm Longhash, Bitcoin’s transactions fee mirrored its price pump. Longhash compiled transaction fees over a 24-hour period beginning at 0950 UTC on May 10, 2019. It recorded Bitcoin amass a whopping $580,000 in transaction fees for the period.
To put this into context, Bitcoin transaction fees were eight times higher than all cryptocurrencies listed on Messari’s OnChain FX.
Ethereum took the second spot, with Messari reporting that ETH miners earned around $68,000 in mining fees on May 10. Interestingly, Messari’s rankings have Ethereum behind XRP, based on Y2050 Marketcap.
Litecoin [LTC], the fifth largest cryptocurrency in the market, which saw its price skyrocket prior to its August 2019 halving, came in a very distant third. The digital silver recorded a measly $1,100 in transaction fees, or 1.61 percent of Ethereum’s fees.
Further, the remaining cryptocurrencies fared even worse, with the next seven coins, Lisk [LISK], Bitcoin Cash [BCH], Monero [XMR], Dash [DASH], XRP, Dogecoin [DOGE], and Ethereum Classic [ETC] amassing just $1,500 in fees. Given this stark disparity between the transaction fees paid for the top cryptocurrency, compared to its altcoin counterparts, the report stated,
“While many proponents will likely cite this as a win for altcoin users, who are theoretically left with less fees to pay when sending transactions, Bitcoin’s daily fees are an example of the currency functioning as its creator(s) intended.”
Longhash further referenced the risk of 51 percent attacks and stated that high transactions fees will prevent such threats. Citing Satoshi Nakamoto, the report highlighted that this is a “way of letting users pay additional money to have their payments prioritized.” The high fees would incentivize miners to “donate their device’s resources for the purpose of verifying transactions.”
In the imminent future, with Bitcoin’s mining rewards set undergo its third halving, transactions fees will prove a more important incentive. From May 2020, mining rewards will drop down to 6.25 BTC per block, resulting in Bitcoin’s fees becoming a more important “financial incentive,” added the report.
The report concluded,
“Many other digital assets, however, take approaches that differ widely from Bitcoin’s governance model. In these circumstances, low fees are something to strive for.”