Bitcoin fees are known to rise and fall sporadically. However, over the past week we’ve seen an unusual spike in fees, reaching heights of more than $30. As the #1 crypto payment processor, we know how frustrating fees can be – so we’re shedding some light onto these recent shifts and sharing advice on how to save on fees.
BRC-20 tokens and Ordinals are causing congestion and fee spikes
The most likely cause of fee spikes is minting of new BRC-20 tokens, Bitcoin-based tokens akin ERC-20 tokens. A slew of memecoins, like Ordi and Pepe, are being issued in droves. Along with these coins, users are creating “Ordinals”, images, videos or text engraved onto a single Satoshi (sat) – think of them like NFTs but on the Bitcoin network.
The rush of ordinals and memecoins have flooded the mempool with a backlog of unconfirmed transactions that are waiting to be processed alongside traditional Bitcoin-based transactions. You can track mempool size to get an idea of congestion and fee levels associated with the transactions.
How you can save on BTC transaction fees
- Patience: Transaction fees spike in times of extreme network congestion. Timing your transactions for low-use times will result in lower transaction fees. Generally blockchain networks tend to be busiest during hours when people in the U.S. are awake. Wait for off-peak hours if you need to save on transaction fees.
- Layer-2: Use a Layer-2 solution to make quick, low fee payments. BitPay supports payments made over the Bitcoin Lightning Network.
- Alternative networks: If possible, utilize another network that isn’t experiencing surges. BitPay supports 16+ cryptocurrencies, including popular alternatives like Litecoin (LTC), Ethereum (ETH), Bitcoin Cash (BCH), Dogecoin (DOGE) and Polygon (MATIC).
- Pay from a custody wallet: Did you know you can pay BitPay invoices from your custody wallet account like Coinbase or Kraken? Utilizing Coinbase + BitPay means your payments are processed off-chain and aren’t subject to as high of fees.
Read our guide to crypto transaction fees and ETH gas fees for a more in-depth look at how fees are calculated.
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Author: The BitPay Team
