Bitcoin's core software has undergone a significant update, with version 29.1 drastically reducing the default minimum relay fee for transactions by 90%. This change, effective September 4th, lowers the fee to 100 satoshis per thousand virtual bytes (0.1 sats/vB) from the previous 1 sat/vB.
Key Takeaways
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Bitcoin Core 29.1 reduces the default minimum relay fee from 1 sat/vB to 0.1 sats/vB.
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The adjustment is a response to Bitcoin's exchange rate appreciation over the past decade.
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While node operators can customize this setting, most are expected to adopt the new default.
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The change aims to balance network security against the need for more affordable transactions.
Rationale Behind the Fee Reduction
The decision to lower the minimum relay fee was made by Bitcoin Core developers on August 15th. They cited the significant increase in Bitcoin's exchange rate over the last ten years as the primary driver for this adjustment. The minimum fee, originally implemented as a protection against denial-of-service (DoS) attacks, is now considered by developers to be acceptable at a lower Bitcoin denomination due to the currency's higher value.
Expected Adoption and Network Impact
While Bitcoin Core 29.1 has been released, its adoption is expected to be gradual. Data indicates that over 72.5% of Bitcoin nodes run the Bitcoin Core software, with Bitcoin Core 29 being the most popular version. However, only a small fraction of nodes, approximately 2.3%, are currently running the latest 29.1 version. Bitcoin Knots, a fork of Bitcoin Core, has also released version 29.1 but has chosen to make policy options configurable, effectively maintaining higher default fees unless users opt-in to the Bitcoin Core defaults.
Community and Developer Perspectives
Bitcoin Core developer Gloria Zhao highlighted that the change also addresses issues with block propagation. Previously, blocks containing many transactions with fees below the default limit could experience slower propagation to nodes that rejected them. By lowering the default fee, developers aim to mitigate these block relay problems while still preventing the network from becoming too cheap and vulnerable to spam or DoS attacks. Services like Mempool.Space have also supported lower fees, advising users against overpaying for blockchain space, suggesting that "0.1 sat/vB is the new one sat/vB."
Sources
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Bitcoin Core Slashes Def Relay Fee by 90%: Update Rolls Out, Cointelegraph.
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