How Do High Transaction Fees Affect the Utility of a Cryptocurrency for Micro-Transactions?

High transaction fees severely limit a cryptocurrency's utility for micro-transactions (small-value payments). If the fee to send a transaction is a significant percentage of the amount being sent, or even exceeds it, the transaction becomes economically impractical.

This forces users to seek alternative, lower-fee solutions like Layer 2 networks or different cryptocurrencies for daily, small-scale payments.