The Bitcoin Network is Congested with Unconfirmed Transactions
Do you remember the time when Bitcoin was advertised as a fast and easy way to transfer money all over the world with a minimal transaction fee. Well, these times are long gone now that we are seeing the 1MB blocks full with transactions, a backlog of almost 200000 unconfirmed transactions and over 100 BTC in fees alone with almost 100MB backlog (100 blocks behind with 1MB block size). As a result there are high transaction fees that start at more than a dollar and can go as high as a couple of dollars just to have your transaction included in a block in a reasonable time. Things are not looking good, unless a consensus for a solution (even temporary) to the small block size is found as with the increase of the price of Bitcoin. Services such as online Bitcoin wallets and such have started to increase the transaction fees already so, that there will be no extra delay for their customers, the problem is that these extra costs are usually covered by the users.
For example the online Bitcoin wallet and a Bitcoin-powered debit card issuer Xapo has recently informed its customers about their plans to actually have the transaction fees for withdraws paid by the users. Prior to that the service did not have users paying the fees for outgoing transactions, but the high fees associated with transfers on the Bitcoin blockchain have forced this change. With low transaction fees covering the extra cost is not a problem for some services, but with the constantly growing transaction fees you can even end up paying more for the actual transaction to be included in the blockchain than the amount you are transferring if it is just a couple of dollars.
Do you remember those promo images comparing Bitcoin to Western Union, PayPal and other popular payment services and talking about how BTC is better with the very low transaction fees cited as one of the key advantages. Well, if this trend continues and a solution is not found soon, then things might end up with Bitcoin transaction fees actually making transfers more expensive than to use a more established alternative payment method like the ones mentioned…
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Published at Wed, 17 May 2017 18:51:16 +0000