Post
Topic
Board Bitcoin Technical Support
Re: Why Bitcoin Transaction Fee increases Over Bitcoin Price Increase?
by
nc50lc
on 27/09/2021, 05:44:23 UTC
-snip- I knew times when BTC fee was only 5000 Satoshi.
Now BTC price Is also I creased so many times and also now it is about 50,000 Satoshi.
This looks like Binance, their current Bitcoin withdrawal fee is flat 0.0005BTC (previously "dynamic", based on the price of Bitcoin).
Before the 2017 bubble, Bitcoin price was excessively lower than today's so if the withdrawal fee is "dynamic", it will be lower as well, so that must be the reason why you've seed 5000satoshi withdrawal fee.

That also applies to other custodial wallets/exchange with dynamic withdrawal fee, not in "non-custodial" Bitcoin wallets.

But in Bitcoin, it's based from the network's condition and size of the transaction (in virtual bytes).
The average 'fee rate' (sat/vB) might increase if there are too many transactions competing in mempools;
the 'total fee' will increase based from the 'fee rate' and if the transaction itself is big in size mostly because of having too many inputs.