In the early days of the Bitcoin network, supporters of the digital currency would tout its near-zero fees and fast payments, but sadly this is no longer the case. The past few weeks have been a nightmare for Bitcoin enthusiasts, because of long confirmation times and high network fees.
Most people have been complaining about fees going as high as $31 to $52 while others have been irritated about the ever-growing number of unconfirmed transactions.
The high fees have been a pain for those with small amounts of Satoshis, considering that Bitcoin has eight decimals. It means that the fractions of the digital currency in their wallets are useless and cannot be spent until the fees subside.
Meanwhile, big exchanges dealing with Bitcoin, including Shapeshift, Bitpay and Coinbase, are informing their customers about the expected delays. Some like Bitpay even went ahead with asking card users to ensure they have Bitcoin worth over $100 so as to cover the fees, but it later changed its stance, reverting back to $5 loads and invoices.
The CEO of Shapeshift, Erik Voorhees, is not happy about the current fees charged on the Bitcoin network, saying that it’s more affordable sending Fedex private keys.
“When it’s cheaper (and sometimes faster!) to Fedex private keys to someone than to send a digital payment, Bitcoin is no longer a P2P electronic cash system,” Voorhees said.
How the Bitcoin Fees Network Works
The Bitcoin network has a fee system that allows it to manage situations in case demand surges, exceeding the network’s capacity. If transactions are higher than a block can accommodate, miners can choose transactions that come with higher fees (priority transactions). This means that the higher the fee attached to a transaction when sending Bitcoins, the more likely it will be taken up by the next block.
This makes Bitcoin transactions a big headache, especially for those using it for day-to-day payments. Debate surrounding the rising demand and high fees seems to be splitting the Bitcoin community, with some arguing that the network should raise the block limit which is currently set at 1MB per block. Others are considering Bitcoin Cash, which was created after a fork in August, 2017.
Do you think the high fees and long confirmation times are slowly killing Bitcoin? Do you feel that this is affecting the supporters of the digital currency enough to consider other coins? Talk to us!