Bitcoin Fees in December 2017 were almost always above $10, sometimes reaching nearly $30. Today we are nearly at the same price and fees have dropped considerably; less than a dollar in most cases. But has Bitcoin actually scaled, or is it just a case of fewer transactions happening on the network?
Fees are only part of the story
The Bitcoin network has had a few issues with fees over the last few years. Because of Bitcoin’s limited blocksize, a large number of users trying to all send transactions at once will congest the network. Transactions that don’t get confirmed get stored in a queue called the mempool.
Miners will generally mine those transactions that pay the highest fee, so people can jump to the front of the queue by paying a sufficiently high fee. It results in a blind bidding war of sorts, where everyone is constantly paying a little bit more to have their transaction confirmed first.
The median Bitcoin fees today are significantly less than the fees users experienced the first time Bitcoin hovered around…