Bitcoin has recently undergone a significant change in its core software aimed at optimizing transaction fees for users. The release of Bitcoin Core 29.1 on September 4 introduces a remarkable reduction in the default minimum relay fee rate, lowering it from the previous standard of 1 satoshi per virtual byte (sat/vB) to just 0.1 sat/vB—a striking 90% cut. This move is poised to enhance the economic viability of moving funds across the network, making transactions more accessible for users.
The adjustment in the default fee structure stems from a decision made by Bitcoin Core developers on August 15. The team noted that the shift was necessary due to substantial changes in Bitcoin’s exchange rate over the past decade. The primary motivation behind the minimum fee policy is to provide a safeguard against denial-of-service (DoS) attacks, but developers acknowledged that with Bitcoin’s higher price points, a lower fee is now feasible.
Node operators have the autonomy to modify this relay fee setting, but the majority are anticipated to adhere to the new default value. A significant aspect of relaying transactions is the fee structure; nodes tend to ignore or reject transactions with fees below their established minimum relay fee, which is crucial for maintaining network integrity and performance.
As it stands, data from BitRef indicates that over 72.5% of Bitcoin nodes—equating to approximately 18,811—utilize the Bitcoin Core software, while nearly 27.25% operate on Bitcoin Knots, a fork of Bitcoin Core emphasizing user control. Among those nodes, Bitcoin Core 29 has emerged as the most used version, with 4,510 nodes, representing over 18% of the entire network. Following it are Bitcoin Core 28.1 with 3,991 nodes and Bitcoin Knots 29.1 with 3,083 nodes. However, currently, only 571 nodes run the latest Bitcoin Core 29.1, accounting for less than 2.3% of the network.
Importantly, the Bitcoin Knots 29.1 version does not adopt the new lower default relay fee but instead opts to maintain the previous rate tenfold higher. This version has introduced options in its graphical user interface (GUI) for configuring policy, allowing users to choose whether to apply Bitcoin Core defaults or stick to its own established settings.
Among the developer community, reactions to the fee reduction have been mixed but generally supportive. Developer Gloria Zhao highlighted that the motivation for lowering the fees was driven by a recent trend where transactions below the previous fee rate were successfully included in blocks anyway. This discrepancy resulted in slower propagation for blocks containing such transactions, as nodes that rejected lower-fee transactions were often out of sync.
In discussion around this fee revision, the Bitcoin network data service Mempool.Space also signaled encouragement for reduced fee structures, advising users against overspending for block space. They emphasized that the new standard of 0.1 sat/vB essentially equates to the former rate of 1 sat/vB, highlighting a shift in the cost dynamics for transaction processing within the Bitcoin ecosystem.
As this change is gradually adopted across the network, its implications for transaction efficiency and user experience are anticipated to unfold in the near future, potentially reshaping how Bitcoin is utilized as a decentralized currency for everyday transactions.
