There are over 40 million Bitcoin wallets in existence. Although this does not imply the same amount of distinctive users, it gives us an idea of what goes on within the ecosystem. The average number of transactions across these wallets every single day is currently around 312,531. In order to find out how much a Bitcoin user spends on transactions, we will need to do some maths. Albeit, this will only give us an idea, and not an absolute value.
Another important point in finding out the cost of being a Bitcoin user is to have an idea of transaction fees. The fees paid for sending Bitcoin across wallets within the network are not fixed. While they may be very small on a regular basis, during network congestion or for those who want to pay priority fees, they are a bit higher. The average fee to have your Bitcoin transaction mined quickly is $0.81 (within the next block) and $1.09 within 3 blocks.
What are Bitcoin Transaction Fees?
Transaction fees are rewards that are received by miners who maintain the Bitcoin network. The process of maintaining the network is what we call mining. These computers that contribute their CPU power to ensure that the Bitcoin protocol is preserved and retains its original decentralized structure. They are also responsible for the security of the network.
To achieve this, these computers primarily process transactions by adding them to blocks on the decentralized ledger. Once a transaction is properly added to the network, it becomes confirmed. Therefore, for the work that they do, these processing units are rewarded by the fees that users pay.
Like we have already mentioned above, the fees paid per transaction depends on a few factors:
- How quickly you want your transaction to be confirmed
- How congested the network is at the time of the transaction
Based on the above, in thirty days we would have 9,375,930 transactions on the Bitcoin Network, making it 112,511,160 transactions in a year. Therefore, at a fee rate of $1.09, the total amount paid by Bitcoin users in fees every year is around $122,637,164.40.
Average Individual Bitcoin Transaction Fees
That aside, let us now talk about individuals and how much a Bitcoin user spends on transactions.
Assuming that you are a frequent Bitcoin user who adopts the cryptocurrency for daily payments and other transactions, you may be involved in an average of 3 transactions everyday. This will imply that you spend $3.27 in servicing your payments daily. At the end of one year, you would have spent an average of $1,193.55. Even if you don’t do up to 3 transactions, but only 1 transaction a day, you would be spending in the region of $397.85 by the end of one year. That’s some cost!
Considering the fact that full adoption of Bitcoin has not been achieved yet, and in order to transfer value you may have to go through traditional banks. The cost can actually turn out to be huge when viewed from a cumulative point of view. This brings us to the question of how can Bitcoin users save costs and still achieve value for their transactions?
How Can I Save Costs on Bitcoin Transaction?
Bitcoins users will automatically be saving costs by using the tap app and card for their transactions. The service which offers a flexible banking system lets users enjoy the full benefits of their crypto assets by minimizing fees. As a matter of fact, transactions on tap are free to a certain threshold. Yes, you heard that right, FREE.
By using the tap platform for your banking purposes, you will enjoy £1000 free Fiat FX exchange per month. This could even cover your total crypto transaction value for the whole month, while you pay a 0.5% fee when the limit is exceeded. You will also enjoy a £500 free ATM withdrawals per month, and pay only 2% fee above this limit. Not only that, there is also a 0.5-1.5% crypto exchange fee reduction, which can rise to up to 25% discount if you pay using Tap tokens.
Bitcoin (and cryptocurrency) is an innovation that is designed to improve the value system of its users during transactions. This benefit is also supposed to reflect in how much a Bitcoin user spends on transactions. While the network and exchanges have not sorted that out yet, tap has already arrived with a solution that beats every other process available.
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