Bitcoin miners now earn 1 BTC per block in fees

Transaction fees on the Bitcoin blockchain have averaged over $20, and experts believe that’s a good thing.

According to data site Clark Moody Bitcoin, Bitcoin (BTC) miners can earn 0.97 BTC (currently worth about $49,000) in transaction fees per block. This is the average over the past 2,000 blocks, which means that many of these blocks may have transaction fees above 1 Bitcoin.

When a Bitcoin miner mines a block, they receive a fixed fee of 6.25 Bitcoins (although this halves every four years) and receive transaction fees for all transactions in that block.

But transaction fees have been rising recently (around $20) and make up a larger percentage of total rewards. Bitcoin miners now make around $40 million per day in total revenue. So fees alone make up 13.47% of total Bitcoin miner revenue.

This suggests that as Bitcoin mining rewards decline over time, fees may continue to increase and replace them, providing miners with a continued financial incentive to keep the network running and secure.

Surging demand has pushed up bitcoin fees. Image: ycharts

As average fees on the Bitcoin blockchain rise, does this mean that at some point Bitcoin might become too expensive to use for “normal” people? Well, kind of, but that could arguably be a good thing, according to Quantum Economics analyst Pedro Febrero.

“We think this is an excellent sign. High fees mean more usage, as transfer fees typically increase once competition to add transactions to the block increases,” Febrero told Decrypt .

High fees may indeed scare off some potential buyers, especially those with less cash. However, data shows that as Bitcoin adoption increases, fees tend to soar - and that's normal. But that doesn't mean no one is working on a solution.

“In summary, we believe that there are developments that are aimed at fitting more transactions per block, such as Segregated Witness and the Lightning Network,” Febrero concluded.