Bitcoin's growth leads to 20x higher transaction fees as mining power grows by 38%

10 Feb, 2021 CryptoParrot

Bitcoin's impressive price surge has spilled over 2021 as the asset hit another all-time high while increasing activity on the network. The rise is also reflected in the transaction fees. 

Data presented by cryptocurrency trading simulator Crypto Parrot indicates that Bitcoin's fees per transaction has grown at least 20 fold between February 2020 and February 2021 on a 30-day average. In February last year, the fee was at $0.6, while on February 8, 2021, the fee was at $12.46, representing a growth of 1,976.66%. 

Additionally, we have overviewed the total hash rate of the Bitcoin network on a 30-day average. Our findings reveal that the hash rate has grown from 109.7 million TH/s as of February 2020 to 151.7 million TH/s, representing a growth of 38.28% over the last 12 months.

The hash rate is the processing power of the Bitcoin network or the speed at which miners are able to perform proof-of-work calculations per second. Typically, the higher the hash rate, the more miners are participating in the network. As a result, more blocks are being mined reflecting the asset’s increasing price.



Bitcoin’s network increasing activity
leads to high fees

The rise in Bitcoin's fees per transaction reflects the increasing activity on the network. Since Q4 2020, Bitcoin has surged to new heights, hitting an all-time high of $47,000 on February 10. 

The surge in the asset's value resulted in most people buying Bitcoin in a bid not to miss out on the rally. When prices surge, more potential investors show interest in buying Bitcoin, since the fear of missing out (FOMO) usually sets in. In this case, the Bitcoin blockchain often gets congested as miners compete to process the transactions leading to a skyrocketing of fees. 

The continuously rising demand for the asset has led to high transaction fees. Additionally, during a bull run, the fee is also impacted by the size of the transaction and mining difficulty. When both metrics rise, the transaction fees also increase.

Rising hash rates reflects healthy mining environment 

Normally, a high hash rate reflects a healthy Bitcoin mining environment, which usually occurs during a price rally. It also means that a growing number of miners are deploying the most efficient mining hardware to compete with each other to process increasing transactions. 

A drop in the hash rate results in a rise in the transaction backlog. During the current rally, it is clear that the metric has been surging steadily. A drop in hash rate also leads to a general price-driven pickup in activity. The mining power dedicated to approving transactions and mining blocks has gone down amid the price rally. 

Over the years, such large consumption of power by Bitcoin mining has resulted in criticism terming the asset not environmentally friendly. However, more Bitcoin mining companies are now shifting to renewable energy sources like solar.


User Avatar


Crypto Parrot Community Mgr - Here to help answer questions, fix things & help out when needed. Got feedback? Send those bad boys here: [email protected]

Related articles

Gamers Vs. Miners: the Weirdest Crypto Battle Yet

Nvidia is purposely building its new RTX Cards graphics card to feature Ethereum mining limiter.…

2mins 5 Mar, 2021 CryptoParrot
Is ADA Entering the Crypto Main Stage?

Cardano is heating up, with new all-time-highs can ADA move to the top in the crypto world?…

2mins 3 Mar, 2021 CryptoParrot
Bitcoin at a Tipping Point?

With increased adoption, major rallies with all-time highs, BTC has certainly been a winner thus far in 2021. Will BTC become the "chosen one" for international trade?…

2mins 2 Mar, 2021 CryptoParrot
Demand for crypto debit cards surges 194% in 12 months

As the cryptocurrency sector matures, debit cards are gaining popularity while helping push for mainstream adoption of digital assets. Consequently, interest in crypto debit cards has been growing in recent months. …

2mins 24 Feb, 2021 CryptoParrot
Start trading

Buy & sell Crypto in minutes. Join the world's largest crypto exchange

Learn more


Login to comment