Bitcoin Transaction Fees Drop Amid Rising SegWit Adoption
“The majority of transactions now support SegWit, currently surpassing 55% on average. And while this marks a near 40% increase compared to the start of 2019, there is clearly more potential for SegWit adoption to grow on the Bitcoin network, which has this year been showing growing signs of congestions. Fees, however, have declined,” Luxembourg-based crypto exchange Bitstamp said in its recent report.
In comparison, in the fourth quarter of 2018, SegWit’s adoption rate stood at below 40%, and in the fourth quarter of 2017, it barely surpassed the level of 10%.
Owing to the rising number of SegWit transactions, median Bitcoin transaction fees stood at between USD 0.0742 and USD 0.67725 in 2019. Such a range has not been observed since 2016 when “the price of Bitcoin was at a fraction of where it stands today,” the report states.
After a bearish 2018, last year brought a new record in terms of Bitcoin transactions, at close to 120 million, the crypto exchange says.
“During 2019, 80% of Bitcoin blocks were above the block limit of 1MB, with SegWit handling the additional weight,” according to Bitstamp. “More blocks over 1MB have been mined during 2019 than all of the previous year. And the possibility of hitting full blocks on average is becoming a close reality”.
An optional protocol upgrade to blockchain networks, SegWit was first activated on Litecoin (LTC) in 2017, and it was subsequently adopted on the Bitcoin network.
Learn more: How to Use Bitcoin SegWit Transactions: a Guide