After a troublesome period of high fees for Bitcoin (BTC) transactions, the network has steadily kept its costs in the last two months at an average lower than what would cost users to buy a Big Mac in the United States. Which gives users more predictability and affordability while sending and receiving Bitcoin from one address to another.
Bitcoin mining transaction fees started to increase on May 2, crossing the $5.00 line and peaking at an average of $31.14 paid by all users for each sent transaction on May 8. This data was retrieved by Finbold from BitInfoCharts.
After that, the average transaction fees consolidated around the $5.00 mark for one month, from May 14 to June 9. Since then, this metric has remained below this key price for over two months until August 24, at the time of publication.
Bitcoin Average Transaction Fee historical chart. Source: BitInfoChart
Interestingly, the $5.00 mark also brings an important economic significance, as it is lower than the average price for a Big Mac ($5.58) in the United States — which refers to the Big Mac Index, widely used for global purchasing power analyses.
The Big Mac index and affordability for Bitcoin transaction fees
The Big Mac Index was invented by The Economist in 1986, based on the theory of purchasing-power parity (PPP), with the sole intention of measuring “whether currencies are at their correct level”, according to the British weekly newspaper.
By comparing the price of a well-known good, present in the vast majority of countries, it is possible to gather insights on the economic reality among these countries. The price for the Big Mac in the US is usually considered as the baseline for all comparisons — making currencies from countries with lower proportional prices, stronger than the ones with more expensive Big Macs.
The Big Mac Index: British pound (GBP) v. the US dollar (USD). Source: The Economist
All things considered, the Big Mac Index can also be applied to other financial analyses of the purchasing power and affordability of a given system, product, or service.
While Bitcoin transaction fees remain below the price of a Big Mac, the use of the Bitcoin Network is more affordable for a higher number of individuals on Earth. Crossing that line would indicate less affordability, in a more exclusive system, that not everyone could take part in.
Notably, despite current relatively low costs for transaction fees, a post on r/CryptoCurrency by a Salvadoran said that most people in El Salvador — where the average wage is $400 per month, according to the poster — consider Bitcoin a thing “only for the elite”, in his words.
