The rise in Bitcoin’s price usually comes with a cost, and that is an equivalent rise in its transaction fees. Since January, Bitcoin’s transaction fee has been on the increase, but the recent surge in price has taken it one step further. At the moment, the fees have risen by over 500 percent since January.
Bitcoin on April 2 spiked to $5,000 from a price of about $4,150. However, the spike also influenced its fee which means that the same amount that was paid for a transaction to be within 10, 30, and 1 hour wouldn’t be the case today. A closer look at Bitcoinfees.info platform reveals that the daily average fee to use a next block, 3 blocks, and 6 blocks are $1.98, $1.98, and $1.89 respectively.
What this means is that for a transaction to be confirmed and added on the blockchain within 10 mins, the next block will be used. For a transaction to be processed between 10 to 30 mins, 3 blocks will be used. Alternatively, settling for 6 blocks will get the same transaction confirmed between 30 minutes and 1-hour. Therefore, the higher the fees, the faster the transaction.
Amounts May Look Insignificant but Could Take a Toll
Now, while these amounts may still look insignificant, if one tends to trade back and forth between several cryptocurrency exchanges in a single day, then a blind eye may not be turned to the fee. As of January 1, the fee for the next block, 3 blocks, and 6 blocks were $0.05, $0.05, $0.02 respectively.
The hike in fees, on the other hand, has given many the impression that it might impede the adoption of Bitcoin. It is believed that as more people adopt the virtual asset, it could hike the charges exponentially. An instance is the case of December 2017, where Bitcoin’s market cap was around $326 billion and one could pay as high as $50 as a fee.
Lightning Network Tackles Bitcoin Scalability and High Fees Problems
Nevertheless, the lightning network seeks to solve this problem while also bringing about scalability. The platform allows more transactions to be processed in a second and it also reduces the transaction cost. All that is required, is to open a payment channel between the transacting parties; a channel that can be left open for hours, days and weeks.
Many have also promoted the lightning network and an instance is the lightning torch trend which began on January 19. A Twitter user, HodlOnaut started a trend where a torch is passed to members of the cryptocurrency community in other to showcase LN’s capability and the integrity of the ecosystem.