Tuesday, February 20, 2018

Bitcoin's transaction fee nightmare is over (for now). Down from a high of $34 - to $0.78 cents today!

It was nothing short of a nightmare - transaction costs upwards of $30 mixed with insanely slow transaction times, making Bitcoin impractical to use as a method of transferring funds.

The issues caused massive divide within Bitcoin communities - sparking the "store of value" debate, which had many saying Bitcoin was now like gold - not to be used in everyday transactions, but rather a place to store funds - a debate that sparked the birth of the controversial Bitcoin Cash.

But now, those fees are dropping, and fast.

Bitcoin fees lowest they've been since October 2017.
Why the drop? Reasons are mixed. There are less transactions overall from it's peak, but largely there has been some efficiency changes as well. A previously rarely used feature of Bitcoin was the ability to send BTC to multiple recipients packaged into 1 transaction.  When fees were low, the feature was rarely used, but it's being used much more today.

However - as Bitcoin's price continues to rebound, it's expected that transaction volume will as well, especially with low fees back in play - which could just bog down the network again, and send transaction costs right back up.

Solutions? SegWit2x increasing the block size, and lightening network are both on the table and gaining support.

The challenge? Implementation. Even after an agreement on a solution is reached, technical analysts believe SegWit2x could take months to be fully adopted.  Lightening Network - even longer, perhaps years due to the drastic complete overhaul in transaction protocol.

Author: Oliver Redding
Seattle News Desk