We checked the actual data: yesterday the average transaction fee on the Bitcoin network was the equivalent of $1.67. Here’s a graph of the figure over the past three years.

Graph of Bitcoin network fees in dollar terms

We note that we are talking about commission in BTC terms, not in dollar terms. Although a direct correlation between these figures is determined by the Bitcoin exchange rate, they are not the same thing.

What is happening to Bitcoin?

As shown in the chart below, in 2022, Bitcoin’s average transaction fee fell sharply to 0.00004541 BTC, which is the equivalent of $2.06. At the same time, the median fee fell to 0.00001292 BTC or $0.59, which is the lowest it has been since 2011.

Falling commissions in BTC

According to Galaxy Digital’s head of research Alex Thorne, such a significant collapse in Bitcoin equivalent commissions was caused by a combination of the growing adoption of Segwit, batch transactions, the growing popularity of Lightning Network, the decline in coin sales by miners, as well as the “decreased use of OP_Return” (we are talking about transactions without UTXO).


Here we are talking about various improvements and add-ons to the Bitcoin network, of which there are more and more over time. The latest major change to the cryptocurrency blockchain is the so-called Taproot. The update increases the privacy of BTC enthusiasts and, in addition, opens up the possibility of creating smart contracts on the cryptocurrency network. Its implementation was supported by most blockchain miners, and they did so rather quickly.


Glassnode’s lead analyst James Check agreed with this assertion. As he explained in an interview with Cointelegraph, the new Bitcoin protocol enhancements from Thorne’s quote increase the number of transactions that fit into a block. This increases Bitcoin’s throughput, which results in lower fees.

In addition Check shared the following graph.

SegWit adoption growth.

He clearly proves that the adoption of so-called Segwit has “increased significantly at the market’s low point between May and July 2021”. The expert continues.

The number one reason for the drop in commissions is that there was a 50 per cent market crash in May, which completely wiped out regular consumers’ interest in crypto.

We have written about this situation in the coin niche in detail in a separate article. We recommend reading it to understand the reasons behind the collapse of the industry, which has become one of the most global in the history of coins.

According to the analyst, all three key metrics of the cryptocurrency network, i.e. commissions, active addresses and number of transactions, dropped almost at the same moment after the May correction last year.

This, in my view, was the likely start of a bearish trend, and even with the subsequent rise in Bitcoin’s price, we saw a great many people go financially broke and therefore leave the market.

It should be noted that after the May 2021 events, Bitcoin still managed not only to recover, but also set a new record of $69,000. This level was recorded in November. So, it was quite premature to declare the beginning of a bearish trend then, and the coin market once again showed the ability to grow.

Comparison of commissions with cryptocurrency network activity

Another record has been set in the number of active users of decentralised applications. According to resource DappRadar, this figure is up 396 percent compared to the first quarter of 2021. At the same time, compared to the fourth quarter of last year, activity is only 5.8 percent lower.

Overall user interest in the decentralised finance (DeFi) sector is impressive given that the crypto market saw a brief bearish trend during the quarter. There were also hacks of DeFi protocols worth around $1.19 billion. Two protocols were hit the hardest – Ronin and Wormhole.

Last month, the so-called blockchain bridge or Ronin bridge by startup Axie Infinity was hacked to the tune of more than $600 million. This happened after an attacker used stolen private keys to fake a fake withdrawal from the protocol. Meanwhile, the Wormhole protocol lost $321 million as a result of the vulnerability back in February.

Activity in DeFi protocols

In addition, DappRadar analysts mentioned the following point in their report.

The first quarter of 2022 had its ups and downs, but was overshadowed by the geopolitical instability in Ukraine. This was one of the biggest events since the global financial crisis of 2008, which shook global markets and had a negative impact on the industry.

Gaming DApps accounted for more than 50 per cent of all user activity in the first quarter of 2022. At the same time, the volume of unique token transactions reached the $12 billion mark. At the same time, the total amount of funds blocked in DeFi tokens exceeds $78 billion.


We believe that Bitcoin's fee situation is indeed a testament to the effectiveness of the blockchain improvements that are being implemented with enviable regularity. In addition, exchanges are beginning to interact with the upgrades created earlier. Well, since there are not so many cryptocurrency users right now because of the overall market downturn, this is how the situation turned out.


Look for more interesting statistics in our millionaires cryptochat. There we will talk about other topics related to blockchain and decentralization.