Bitcoin transaction fees have skyrocketed. They are around $50 per transaction now.
Bitcoin transaction fees have skyrocketed. They are around $50 per transaction now.
One user up above said: "If your transaction wants to compete with the limited block space for each transaction, you have to increase your fee"
My question is: is there any end in sight where transaction costs might come down? Because otherwise BTC is totally unusable as a currency.
I think folks who are really invested in BTC (like the Winklewoss brothers who have holdings above a bil value (in essence, illiquid, as holdings of that amount tend to be) might work to make transactions low using whatever new technology thereby making it a viable monetary platform, otherwise I don't see this thing as not failing spectacularly sometime in the future.
Big blockers believe that it should possible to solve this problem directly, by increasing the block size limit. "Small blockers" argue that this is not a suitable solution in the long term because the block size would need to grow to gigabytes per minute to compete with existing payment networks and that would be technically challenging and politically undesirable (since only a handful of well-connected nodes would be able to handle all that traffic).
The promised solution, according to the small blockers, is to add extra layers to the bitcoin network, with things such as the Lightning Network. Regular folk would clear their transactions through payment processors and only these payment processors would still use the original bitcoin network. Big blockers complain that these second-layer solutions are not truly decentralized and do not conform to the original ideals of bitcoin. They also point out that there are lots of unsolved problems and technical challenges for these second layer solutions, which have been constantly "just around the corner" for a long time...
Pending transactions with anything above 140 satoshis per byte are currently clearing, as you can see here:
https://jochen-hoenicke.de/queue/#2d
The average bitcoin transaction is around 250 bytes, which means transaction fees in the area of 0.00025BTC and up are clearing in half an hour or less. That's about $4.
Lets keep the hyperbole to a minimum, please?
P.S. As you can see by mousing over that chart a bit, there /are/ a lot of people paying as much as $50 for a transaction. These people are sometimes morons, but more likely they are transacting on exchanges where they have to use predefined fees instead of setting them themselves. This is why it's important to use your own wallet instead of a web wallet. It lets you control these kinds of things.
P.P.S If you set those charts to 6 months you'll see some interesting patterns start to show up. Speculation on what's causing them is left as an exercise for the reader.
There's a lot of politics involved. Some people have vested interests in generating a fee based panic. I don't know the full picture though.
It's what bitcoin core developers prefer. They don't want segwit to bloat the blocksize before lightning is ready.