Bitcoin transaction fees reached record highs in 2024, following a surge earlier in the year after the halving event in April. The increase in fees was largely attributed to the introduction of a new protocol called Runes, which significantly boosted network activity and congestion. On April 20, transaction fees peaked at 1,257.71 BTC, accounting for over 75% of miner revenue for the day.
However, fees have since subsided as other protocols like Ordinals and Runes faded in popularity. The surge in fees had various impacts on the Bitcoin ecosystem, making transactions more costly and leading to a decrease in active addresses on the network to a three-year low.
Despite the recent drop in fees to mid-2023 levels, a recent uptick has been observed, indicating that any resurgence in the popularity of Inscriptions could see fees return to elevated levels. It will be crucial to monitor how these fee conditions influence Bitcoin’s usability and miner profitability as the year progresses. The long-term effects of these changes are likely to play a significant role in shaping the future of Bitcoin transactions and network participation.
