High Fees
Note: All data in this section updated as of March 30th, 2022
Both Bitcoin and Ethereum suffer from high fees. As of March 2022, the mean transaction fee was $1.56 for BTC and $8.20 for ETH (and these are actually historical lows, as ETH fees averaged $50 to $75 several times in 2021).
This makes them impractical for daily use – after all, imagine having to pay $2 to $8 (or even $75) dollars in fees for a cup of coffee!
Average Transaction Fees Bitcoin and Ethereum
While this seems like an insurmountable problem, there are several mitigating factors to consider:
Unlike traditional finance, fees are independent of the transaction amount (i.e. it costs the same to send $1 or $1 million), so while this may be a problem for daily use, it’s actually much cheaper than standard costs for bank wires and remittances and also cheaper than a credit card for larger purchases
Projects like Ethereum are working very hard on lowering fees, and some estimate the transactions may cost less than a penny when the upgrade to ETH 2.0 is finally complete (although that is likely years away)
We have recently seen the creation of alternative blockchains – such as Avalanche, Solana, Cardano, Polkadot, Binance Smart Chain and Terra – that offer significantly lower feeds and transaction times.
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