CRYPTO MOVERS AND PRICES
BTC was outperforming this morning as crypto recovers from yesterday's selloff. Alt-coins in the Top 20 remain unchanged.
Crypto Story of the Day
BTC transaction fees priced in the asset have remained well below highs from 2017. This is despite 2021 network usage metrics that surpassed those from 2017.
BTC transaction fees are a function of a number of factors. This includes size of the transaction— the number of coins being sent— and the complexity of the transaction, which includes factors such as the use of multisig, a term for using more than 1 private key to authorize transactions. A high degree of network demand, typical during periods of increased volatility, also drives up the price of transactions.
On December 22, 2017, just days after BTC reached its then-record high, BTC transaction fees totaled 1,496 BTC, or USD 20.71 million. The average transaction fee on that day totaled USD 51.83. The record transaction fees corresponded with then-record highs of daily active addresses on the network, 1.2 million, and an all-time high in the number of daily transactions, totaling 395,000.
Over the past 5 months, amid increased network demand, the highest daily sum of transaction fees was 301 BTC, or USD 16.75 million, with individual fees averaging USD 59.88.
Unlike in 2017, 2021’s bull run saw substantially fewer daily transactions. This can be attributed to major crypto exchanges having introduced “transaction batching” since 2017. Batching allows exchanges, or other major entities, to facilitate customer withdrawals via a single transaction to multiple wallets.
The number of daily active addresses, however, surpassed 2017 records, and on April 15 totaled 1.36 million.
In December 2017, SegWit usage averaged 10%. SegWit is a change in the transaction format of BTC which increased data efficiency, lowering costs, among other effects. In 2021, SegWit usage averaged 51% and reached an all-time high of 66% just yesterday. If the network saw the same transaction fees, priced in BTC, in 2021 as it did in 2017, the average 2021 transaction fee would've peaked at about USD 208 due to the asset’s USD price appreciation.
The data described above suggests that the BTC network has seen substantial but incremental evolution since 2017. Both transaction batching and SegWit have staved off prohibitively high transaction fees. Notably, batching didn’t require operationally risky and potentially divisive network upgrades.
To date, innovations related to the BTC network have largely been overlooked by traditional and crypto media which have chosen to focus on more dramatic and less incremental upgrades, such as those associated with Ethereum or Cardano.