



While Bitcoin “whales” are a prominent part of cryptocurrency discussions, there is also a significant portion of users who hold relatively small amounts of BTC.





According to BitInfoCharts, a total of 18,124,283 wallets currently hold more than $1 USD worth of Bitcoin, but less than $100 USD. As the result of current transaction fees, however, these users may be hesitant to send payments with Bitcoin.













Bitcoin’s distribution of wealth





Compared to “small” Bitcoin holders (those with $1 to $100 USD worth of the asset), there is purportedly a total of 542,000~ Bitcoin addresses that hold $10,000 at today’s conversion rate. Conversely, around 6.1 million addresses hold less than $1,000 USD worth of BTC.





While this distribution may be a positive sign that Bitcoin is not just for the wealthy, high transaction fees could pose an obstacle for small holders.





Earlier this year, Bitcoin transaction fees were quite low, meaning that the asset was closer to being an effective, daily payment tool. At the time of writing on June 5, however, the cost of having a transaction processed in the next Bitcoin block (approximately 10 minutes) is $2.54 USD.

Relatively high transaction fees could make small wallet holders less likely to transact







Transaction fees serve as an incentive for miners to play a functional role in Bitcoin’s governance. They are determined by factors such as how congested the Bitcoin blockchain is at the time the transaction is taking place.





The cost of sending a Bitcoin transaction is not determined by the amount of money being sent. This means that both small and large transactions can end up costing the same amount in fees. Historically, this has made Bitcoin and other cryptocurrencies a great way to send large transactions, as the fee was often much cheaper than other modern payment methods. However, Bitcoin’s fixed fee can make sending small transactions seem too costly to be feasible on a regular basis.





While it may be encouraging to see so many small Bitcoin holders, high transaction fees could mean that many are unlikely to spend their BTC at the current point in time. The sheer number of small Bitcoin holders illustrates the need for scaling solutions that combat the asset’s intermittently high transaction fees.







