The chief technology officer (CTO) of Blockstream, a for profit company that hires a number of current bitcoin developers, stated he was pouring champagne to celebrate stupendously high fees of $50 or more and an entire city (287,000 transactions) waiting to go about their business and do commerce in bitcoin. Maxwell said:
“Personally, I’m pulling out the champaign that market behaviour is indeed producing activity levels that can pay for security without inflation, and also producing fee paying backlogs needed to stabilize consensus progress as the subsidy declines.”
For the first time yesterday, fees per block were briefly as much as the minting reward of 12.5 btc, worth at the time some $200,000, doubled by fees to nearly half a million every ten minutes.
As that minting reward is to eventually go down to near zero in a century or so, Maxwell is seemingly of the view that fees have to pay for miners even at this stage.
Why now, and not in say five years or a decade, has never really been explained. Nor is it clear to anyone why fees should equal the block reward at this stage when the block reward itself gives miners billions.
However, what is clear is that this situation of stupendous backlogs with entire cities stuck even while they pay $50 for the privilege is in no way temporary for bitcoin.
This is now apparently the new normal and even to be celebrated by the current bitcoin developers, led primarily by Blockstream devs who have refused an increase in capacity and have actively fiercely fought against it.
So fees may continue to rise, perhaps to $100 or even $1,000 if the market is willing to bear it. With no one sure what would happen if the market is unwilling to do so.
A move to another digital currency, with flippening talk going on for months, might be a possibility, but bitcoin’s price movements do seemingly highly influence other coins, perhaps because many are primarily traded against btc.
However, that may change. ViaBTC is to launch a BCH only traded pairs exchange. Others may follow, especially if it becomes clear the high fees and stupendously high congestion situation is potentially hurting the entire ecosystem, not just btc.