The Fees and Block Space

Fees aren’t just how much it's the cost of moving sats around—If block space is prime real estate, then fees are the price of rent. And like all markets, the relationship between fees and usage is a constant dance.

High Fees →Creates Efficient Use of Block Space

When fees rise, waste disappears. Suddenly, mempool space is too expensive for bloated transactions, spam, or frivolous usage. Wallets batch payments. Developers implement better compression techniques. Individuals wait until they really need to move funds. Every byte is scrutinized because every sat counts. High fees enforce discipline. They push everyone toward efficiency.

Efficient Use of Block Space →Create Lower Fees

That very discipline creates breathing room. With fewer wasteful or poorly optimized transactions, the limited block space is used wisely. Consolidations happen when traffic is light, batching reduces transaction counts, and protocols get leaner. As efficiency spreads across the network, the pressure on block space decreases—bringing fees back down.

Low Fees →Creates Inefficient Use of Block Space

But when fees are cheap, people tend to get sloppy. Users don’t care about consolidating inputs. Developers feel less pressure to innovate in space-saving techniques. Spam and frivolous transactions creep back in because the cost is negligible. The result? Block space fills inefficiently, and when demand spikes again, the pendulum swings back to high fees.

We're not promised a free transactions. Bitcoin ensure a fair market for global settlement. Fees and block space works hand in hand to maintain that fairness.