- Bitcoin mining pools lowered minimum transaction fees to a record low on July 15, raising risks for potential blockchain forks.
- A 90% fee cut caused transaction fees to fall to multi-year lows, affecting block propagation and miner revenues.
- Senior developers warn that the change makes compact block propagation less effective, increasing data requirements for pools by up to 8,000%.
- Decreased fee levels have led to higher risks of temporary chain forks and added costs for mining pool operators.
- Recent shifts include more companies holding Bitcoin, relaxed data storage rules, and fewer on-chain transactions due to the focus on off-chain accumulation.
On July 15, major Bitcoin mining pools reduced the minimum transaction fee requirement to one-billionth of a Bitcoin, aiming to lower barriers for network use. Developers now warn that this move has increased the risk of blockchain forks, impacting the stability and efficiency of the network.
Transaction fees fell by 90%, reaching their lowest point in years. As a result, fees now stand at less than 1 satoshi per virtual byte. Matt Corallo, a senior developer, noted that the fee reduction has negatively impacted the performance of compact block propagation—a process used by mining pools to quickly share new block information and avoid building on outdated chains.
“They drove down fees just to hurt themselves,” Corallo said, explaining the self-inflicted issues. Compact block propagation compresses block data to speed up communication among miners, especially those in remote locations with slower internet. However, Antoine Poinsot, another senior developer, reported that the recent fee cut has increased the required compact propagation data size by roughly 8,000%, from less than 10 kilobytes to 800 kilobytes. According to Poinsot, this increase makes compact blocks “completely ineffective” for reducing block propagation time, and miners may now face higher bandwidth costs and greater fork risks.
For additional context, more companies have started holding Bitcoin on their balance sheets this summer, following strategies similar to MicroStrategy. These moves, paired with U.S. policy shifts, have driven Bitcoin’s price up. Meanwhile, Bitcoin Core developers relaxed rules for storing non-transaction data on the blockchain earlier in June, but this has not led to a significant increase in data storage or network usage.
With the new fee structure, most blocks are only partially full, and node operators are seeing rising risks of chain splits—temporary forks caused by delayed block information transmission between mining pools. As Corallo explained in a recent post, “Pools sometimes are geographically diverse and may even fork themselves.”
Now, mining pools must spend more on bandwidth and technical measures to prevent building on obsolete chains, increasing operational complexity. Some developers, including Corallo and Poinsot, stress that the network will need additional safeguards after the fee policy changes to avoid losing block rewards to accidental forks.
For more technical backgrounds on compact blocks and the fee reduction’s impact, see Corallo’s detailed explanation and Poinsot’s summary.
✅ Follow BITNEWSBOT on Telegram, Facebook, LinkedIn, X.com, and Google News for instant updates.
Previous Articles:
- Delhi Court Orders WazirX Owner to Disclose Binance Deal, Hack Probe
- Microsoft Unveils AI Agent ‘Project Ire’ for Autonomous Malware Detection
- Modi to Visit China for SCO Summit, De-Dollarization on Agenda
- Marex Adopts JP Morgan’s Kinexys for Instant Cross-Border Payments
- Bitcoin Slides Despite Dalio Boost as SEC Unveils Bold ‘Project Crypto’
