Bitcoin Core 29.1 Update
In a significant update for Bitcoin, the default minimum relay fee for transactions has been dramatically reduced through the release of Bitcoin Core 29.1 on September 4. The newly established fee is now set at 100 satoshis per thousand virtual bytes, which is a staggering 90% decrease from the previous fee of 1 sat/vB. This adjustment aims to facilitate more economical transaction processing within the Bitcoin network, particularly in light of the currency’s evolving market values.
Rationale Behind the Fee Reduction
The modification, agreed upon by Bitcoin Core developers on August 15, addresses the shifts in Bitcoin’s exchange rates over the past decade. The developers pointed out that the minimum fee, originally intended as a protective measure against denial-of-service (DoS) attacks, can now be lowered given that Bitcoin’s value has significantly increased.
Transaction Fee Structure
Transaction fees are calculated based on the size of the transaction in relation to satoshis, which are the smallest denomination of Bitcoin. Each node operator in the network has the option to adjust this setting, yet most are anticipated to maintain the default fee rate. Nodes that operate under a minimum relay fee will likely not transmit transactions that fail to meet their set threshold.
Current Node Distribution
Currently, data from BitRef shows that Bitcoin Core is prevalent, with more than 72.5% of all Bitcoin nodes (18,811 total nodes) utilizing this software variant. Conversely, approximately 27.25% operate using Bitcoin Knots, a derivative of Bitcoin Core that emphasizes user customization. When examining the most widespread node versions, Bitcoin Core 29 is the front-runner with 4,510 nodes, comprising over 18% of the total network. Other popular versions include Bitcoin Core 28.1 with nearly 16% and Bitcoin Knots 29.1, which represents about 12.31%. However, only a small faction, 571 nodes, have transitioned to the new Bitcoin Core 29.1, translating to less than 2.3% of the total network.
Community Response
It is noteworthy that while Bitcoin Knots 29.1 aligns with Bitcoin Core 29.1, it does not adopt the same default settings. Instead, it provides users with configurable policy options and a ‘corepolicy’ feature to utilize Bitcoin Core defaults if desired.
The community’s reaction to the fee reduction has been largely positive. Gloria Zhao, a developer associated with Bitcoin Core, has noted that the adjustment reflects a broader trend in which transactions below the prior fee are still being mined, indicating a need for more reasonable fee structures. She pointed out that keeping fees excessive could hinder block propagation among nodes that do not acknowledge lower fees, which had caused network latency issues.
Conclusion
In sync with the new developments, Mempool.Space, a service that provides data on the Bitcoin network, had also previously encouraged users to take advantage of the lower fee, suggesting that the new rate of 0.1 sat/vB becomes the effective standard replacing the earlier rate of 1 sat/vB. This move is expected to enhance the overall efficiency of transactions across the Bitcoin ecosystem.
