Explanation

Users pay fees to miners when making a transaction on a blockchain network. While the size of the fee is voluntary, miners can pick which transactions to include in the blocks. Naturally, the higher the fee, the more likely a transaction is to be chosen. Fees do not take transaction size into account, which makes large value transfers cheap, and micropayments relatively more expensive.

Due to the limited space in each block, fees are a way to incentivize miners to include a transaction into a block. In this way, fees are indicative of the level of demand on a blockchain.

The need for prioritising transactions comes down to the transaction throughput of the network. If there are more transactions than the 8 transactions-per-second (TPS) throughput, the fee market hots up. This dynamic means that fees are a good gauge of the level of economic activity within the Bitcoin Network.