Optimal Fees for Bitcoin Transactions Rise Above $2

0

A fee of $2.03 needs to be paid for a higher than 75% chance of inclusion in the next block, according to Blocktrail, a bitcoin explorer. While low priority fees stand at $0.65, falling slightly from above $1 just a few days ago.

Bitcoin is currently operating above capacity, with demand rising to 5 transactions per second when the chain can only handle around 2-3 transactions per second.

This has led to a considerably increase in fees which have risen from a fraction of a cent to Visa and Paypal levels, pricing out some businesses, while others have stopped covering the fees for their users.

There is a long debate on how to solve the matter with Bitcoin Core supporters preferring an on-chain fee increase to keep the blockchain size small. Users should transact on the Lightning Network (LN), a new protocol on top of bitcoin that remains in development, according to Bitcoin Core supporters.

Bitcoin Unlimited prefers an on-chain increase of capacity to reduce fees, while also supporting layer two protocols which should be optional, they say. However, neither side has gained majority support.

Segregated Witnesses (Segwit), a Bitcoin Core proposal that slightly increases capacity while enabling LN, has seemingly stalled at around 25% miner support. Bitcoin Unlimited has gained some momentum, with its hardware share increasing, but still stands below majority, with around 33% of network share.

As the two sides remain divided, there may be a split. In such event, some of the biggest bitcoin exchanges, including Bitfinex, Bitstamp, and Kraken, have stated they will disregard the miner’s hashrate and will list the Bitcoin Core chain as BTC regardless of whether it is the longest chain or, presumably, whether it has a higher price.

They state that some have not decided whether the Bitcoin Unlimited chain will be listed, but if they do list it, it will be under a BTU or XTU ticker, potentially causing much confusion, especially if BTC is at 10% or less of BTU’s price.

That suggests a split might be unlikely with a stalemate potentially continuing, leaving other digital currencies as a better alternative. Ethereum, specifically, has gained much momentum and price appreciation recently, seemingly becoming the preferred choice of some bitcoin holders and businesses.

Bitcoin’s price fell by around $30 on the news, after falling by more than $100 yesterday.

Comment

100000
  Subscribe  
Notify of