It is now more expensive to send Bitcoin.
Transaction fees of Bitcoin have hit a new all-time high, bringing the cost to send BTC higher than the 2017 peak.
Bitcoin’s “digital gold” narrative could be getting even stronger, as the investors in the cryptocurrency are more incentivized than ever to hold rather than spend it. Making a Bitcoin transaction is now the most expensive as it has ever been: the normal cost of sending the cryptocurrency is now $59.87.
It is more expensive than the previous bull run, last December 2017, when the average cost hit $55.17. In the past 10 days alone, the average transaction fee has soared by more than 300% and in April, it was 414.86.
This is because many people are using the Bitcoin network. And with more people using the network, comes even more expensive fees.
One needs to get approved by a miner in order to make a transaction on the Bitcoin blockchain. Miners use powerful computers to solve complex problems which will validate transactions. Miners are rewarded in Bitcoin for their work and if the network is busy, a premium must be paid to get the job done.
But if the user is willing to wait, lower fees can be paid, but there will be a longer waiting time. Leon Johnson, a bitcoin developer said he recently paid just $2.99 by accepting a slower confirmation time.
“Other networks’ coins are quicker, but their network is not as secure,” he said, noting that the Lightning Network—a “second-layer solution” that is speeding up transactions by skirting the comparatively slower main Bitcoin blockchain—will help soon.
“Bitcoin can be both digital gold and fast moving money, I see them as complementary rather than exclusive,” he added. “In the long term on-chain fees will go up but I see off-chain tech such as Lightning alleviating users’ pain.”
However, not all people are using the Lightning Network. Not many people are using Bitcoin to make payments for everyday things on the internet. Johnson elaborated that most people use wallets and exchanges that don’t support the solution.
“Once Coinbase (if ever), Binance, Kraken, roll out the Lightning Network, it will pick up,” he stated.
“All blockchains have limited throughput. Sending a transaction can be either cheap or desirable, but not both.”
James Prestwich, Bitcoin developer and founder of decentralized finance (DeFi) startup, Summa
Now, Bitcoin is mostly being pushed as a store of value, especially by the big investors. However, if an average person wants to get a hold of the cryptocurrency, he will likely need to turn to a solution that will make it worth his time.
📣 Cryptonetwork.News is now on Telegram. Click here to join our channel and stay updated with the latest Cryptocurrency, Blockchain, and Cryptomining headlines
No Comment