One of the biggest bitcoin exchange has raised their transaction fees for withdrawals to a flat $7 (0.0025 BTC) as bitcoin’s capacity crisis continues unresolved, sending fees higher and higher.
“The average miner fee required to prioritize and confirm Bitcoin transactions has been increasing for some time without a corresponding increase in the fee we charge to clients.” – Kraken said in an email statement.
Bitcoin’s median transaction fees have risen to around $5 as the backlog now fails to clear with some transactions always waiting to move to their destination.
Miners are now paid nearly $2 million in fees everyday, a sum that is not far off the $5 million they receive every 24 hours from mining rewards, with fees now making up nearly a third of their daily income.
Adam Back, Blockstream’s President, publicly stated he would pay $100 dollars for one bitcoin transaction, in response to Bruce Fenton stating people are willing to pay $20 per bitcoin transaction.
The plan is for on-chain fees to increase to $1,000 or even $10,000 per transaction as everyone is meant to use the Lightning Network (LN), which has its own fees on top, with bitcoin’s blockchain reserved for bitbank hubs.
The Lightning Network, however, is no where to be found. Litecoin was pushing for segregated witnesses (segwit) mainly to implement LN, but although segwit has gone live there some time ago, there is no LN around.
Businesses aren’t waiting. They have been pivoting to eth, which has as good as free transactions. As have users, sending its market cap to nearly $25 billion, with eth’s transaction levels now not far off from bitcoin’s as many speculate it will overtake it in market cap, perhaps by the end of the year.
They argue eth can do everything bitcoin can, and can do it better, while also being able to do far more things bitcoin is unable to. That’s because eth’s confirmation times are in seconds, with fees in pennies or sub-pennies, while its smart contracts breakthrough technology allows its use in diverse industries, from energy to finance to music.