The cryptocurrency industry has been gradually accepted in the different sectors of the different industries worldwide.
Among all its effective reasons, what most crypto enthusiasts love is that cryptocurrency offers a lower-cost transaction fee and is not linked to any third-party agents such as the government or banks. Bitcoin is one of the cryptocurrencies that is famous for its low transaction fees, and those traders and investors who have been following Bitcoin from its development noticed one thing: Bitcoin transaction cost goes down every four years. Is this a coincidence? Read on to know!
Bitcoin is a cryptocurrency developed by an anonymous person under the alias Satoshi Nakamoto in 2009. Since crypto is not associated with the government or banks, all the transactions involving bitcoin are recorded in a public ledger called the blockchain. This ledger shows the transaction history for each unit and proves ownership. Crypto investors and traders feel a sense of security knowing their transaction data are stored in a safe place.
Over the years, the number of cryptocurrencies has increased – while some exchanges have shown great potential and are almost at the same level as Bitcoin, some just failed to make an impact. The thing is that there are platforms that require higher transaction and registration fees, and Bitcoin Motion is not one of those. This platform only requires a minimum deposit of $250 to place your first order. Plus, you will be connected with reliable brokers that possess automated trading software, trading robots, stop-loss systems and automation tools.
Bitcoin Transaction Cost Factors
Bitcoin remains the most popular and top crypto by market cap today. With its $417,569,862,044 market cap, the first crypto just proved its dominance against thousands of altcoins in circulation worldwide. To fully understand Bitcoin transaction fees, it’s important to understand the technique of transaction processing. To give you an idea, check out the factors that affect the bitcoin translation costs.
1. Cryptocurrency Regulations
Some countries around the world think of bitcoin as beneficial for economic growth, while other institutions consider them as a threat that could trigger economic collapse. Either way, the crypto industry has always been the subject of regulations to ensure users’ protection and compliance with the required laws – these initiatives are another factor that could potentially affect the cost of bitcoin.
2. Cryptocurrency Adoption
The price of bitcoin could increase above the prevailing price as more people start adopting the cryptocurrency. On contrary, the value goes down when the demand goes down, causing the price to fluctuate. Since the number of bitcoin users is increasing, the value of bitcoin may experience a stable movement. Investors can monitor market growth to predict how prices may change and thereby make the needed trading adjustments.
3. Cryptocurrency Market Cap
The market cap or market value is an important factor that affects the bitcoin price, as it determines the trends in the industry. For example, most investors would consider cryptos with a higher market cap because it shows high potential gains. As more investors jump in, wider adoption may occur and increases the bitcoin price.
4. Cryptocurrency Halving
Bitcoin has a pre-set limit of 21 million coins, and as these available coins reach the limit, a significant impact is observed on the market. The number of tokens for miners becomes fewer, and coins in circulation also get smaller. By the next years, there might be no more coins to mine and new rules may be established to keep the market operating.
Bitcoin’s Transaction Cost Goes Down Every 4 Years
With Bitcoin’s thirteen-year-old ecosystem, there’s no wonder why it has an interesting pattern powered organically by investor sentiment and market conditions. With bitcoin’s per transaction cost coming down to $56.846 on Thursday, the cryptocurrency’s nature unveiled a cycle wherein the per transaction costs invariably go down every four years. The cost per bitcoin transaction can be calculated by dividing miners’ revenue by the number of transactions.
The rise and fall of the cost per transaction of bitcoin is a pattern seen every four years. Since its development in 2009, bitcoin’s cost per transaction follows through its rollercoaster cycle three times – in 2014, 2018 and 2022. If this continues, the cost per transaction would overshadow the current all-time high by 2026, which would be followed by a downfall around the $50 range.
The cost per transaction dropped to 81% in July 2022 from its all-time high of $300.331 in May 2021, and this is because of a prolonged bear market and fewer on-chain arrangements due to regulatory rules established on the crypto investors. The miners’ revenue has also seen a significant reduction throughout the year 2022. Bitcoins are created by mining software and hardware at a specified rate, which splits in half every four years, thus, slowing down the number of coins created and the reason why transaction cost goes down.
A bitcoin transaction is more than just sending one or more bitcoins from your account to the account of someone else. Various factors affect the process, including transaction speed and transaction costs which are subject to demand fluctuations. Bitcoin is known for its low transaction fees, and due to mining factors, it’s unstable and follows a pattern which goes down every four years. Given the volatile nature of the market, anything can happen in the crypto-verse, and crypto traders and investors are expected to observe and practice careful judgement on financial transactions.