Bitcoin Adjusts Default Minimum Relay Fee

Bitcoin’s core software has lowered the default minimum relay fee for transactions, marking a significant adjustment in how users transfer funds on the network.

With the release of Bitcoin Core 29.1 on September 4th, the default minimum relay rate is now set at 100 Satoshis per 1000 virtual bytes (0.1 SATS/VB), a reduction of about 90% from the previous default of 1 SAT/VB. Users pay this fee based on the size of their transaction in Satoshis, the smallest Bitcoin unit.

Node operators have the option to change this setting, but most are likely to stick with the default values. It’s worth noting that nodes typically don’t relay transactions if the fees fall below the established minimum relay rate.

This decision was made by Bitcoin Core developers on August 15th, and aimed to adapt to the changes in Bitcoin exchange rates over the last decade. The proposal indicated that the lower fee structure is also a safeguard against Denial of Service (DOS) attacks, although it suggests that, if prices rise significantly, lower Bitcoin fees might become acceptable.

Node Software Statistics

As of now, data from BitRef indicates that more than 72.5% of Bitcoin nodes (18,811) operate on Bitcoin Core Node software, with around 27.25% using Bitcoin Knot. A closer look reveals that Bitcoin Core 29 is the most widely used, with 4,510 nodes, which accounts for over 18% of the network.

Following that, there are 3,991 nodes running Bitcoin Core 28.1 (almost 16%), and 3,083 nodes using Bitcoin Knot 29.1 (12.31%). Meanwhile, only 571 nodes currently use Bitcoin Core 29.1, making up less than 2.3% of the network.

While Bitcoin Knot 29.1 is based on Bitcoin Core 29.1, it doesn’t adopt the new default settings. This update allows most policy options to be configured through GUI options and introduces a ‘CorePolicy’ feature to utilize Bitcoin Core’s defaults.

In the ongoing transition, the 571 nodes using Bitcoin Core 29.1 and the uncertain number of 3,083 Bitcoin Knot 29.1 nodes might be shifting towards the newer, lower minimum relay fee approach.

Community Reactions to Fee Changes

Gloria Zao, a Bitcoin core developer, stated that the adjustment reflects a trend towards mining transactions becoming cheaper than previous standards. The fixed default value previously led to complications since node operators could favor different rates.

This situation created some issues, like blocks crowded with sub-1SAT/VB transactions struggling to propagate effectively among nodes that had either rejected or hadn’t encountered them. While Zao noted the importance of keeping default rates from getting too low—as a security measure against spam and DOS attacks—there is still a need for adjustments to address block relay issues.

Mempool.space, a Bitcoin network data service, has advocated for lower fees, advising users to avoid overpaying for their space on the blockchain. They stated in a mid-July post, “0.1 SAT/VB is the new standard.”