The cost of sending both Bitcoin and Ethereum is right now at its highest and fees are still climbing.
Bitcoin investors could be having a field day because of the cryptocurrency’s soaring price but those wanting to send the coin will not be very well pleased: the transaction fees are climbing high – and very quick.
The cost of moving Bitcoin is now the highest that it has been in three years: $25.46 on average, according to the latest data from BitInfoCharts. The fees have climbed quickly this week after Elon Musk’s Tesla announced that it had bought the cryptocurrency.
Ever since the news, the fees soared up to 122% in just three days and they were $11.45 last Sunday.
Still, it is not all gloom and doom. The price of Bitcoin broke another all-time high this week and it is still cheaper to send cryptocurrency now compared to the previous bull run, in 2017, when fees touched $55.
Additionally, according to the experts, several people are now holding the asset anyway. Bitcoin developer Leon Johnson stated that it is not something to worry about for the average Bitcoin investor.
He continued that the solution was the Lightning Network, a “second layer solution” that speeds up transactions by skirting the main Bitcoin blockchain, but some people wouldn’t use it for it is still not available with the most popular wallets.
A software developer at crypto research firm Arcane, Torkel Rogstad, also stated that if fees were always low, it could mean that the Bitcoin blockchain wasn’t that useful.
Fees will go up when more people are sending Bitcoin because everyone wanted their transaction to be processed as quickly as possible. If the network is busy, more users are willing to pay a premium for miners to prioritize validating their transactions.
A similar problem now goes for Ethereum, the second-largest cryptocurrency by market cap. The average price of sending the currency was $24.24 as of now and it is fast approaching the highest that it’s ever been, at $25 – it touched that milestone last week. At the start of the year, the cost of sending Ethereum was $9.
ConsenSys developer Jordan Lyall stated that, just like Bitcoin, the demand for the network is high. This is because an increasing number of people are using decentralized finance (DeFi) platforms, which run on the Ethereum network. He added that several projects that address scalability can help reduce those kinds of fees. However, if recent data is anything to go by, the projects are not being used yet.
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