The Lowdown on Bitcoin Fees

More traffic leads to more congestion, and ultimately less congestion recently is responsible for much lower bitcoin fees. Of course, many of us realize how high bitcoin fees reached in recent times, these “network fees” are down from the mid $20s last year to as low as $3 USD lately. The question is are these lower fees here to stay.

In a recent coindesk article, Alyssa Hertig — in explaining “bitcoin's long-raging fee debate” — points out that the number of overall transactions using bitcoin have fallen by around half, resulting in the lower fees we now enjoy. Hertig explains that neither SegWit nor “batch” processing are likely responsible for the decreased fees, although each can potentially lower costs. More interestingly, she notes is the fact that developers have become conscious of the importance of minimizing their blockchain footprint through various optimizations. Yet it seems that lower overall transaction numbers are most likely the cause.

Of course, additional forks have created alternatives to arrive at lower fees, and it is a possibility that users have defected to other coins. For instance, BCH was developed to lower fees; however, Hertig’s article points out that BCH has only about 10 percent as many transactions as bitcoin. Other coins, such as ETH, XRP, and LTC have all recently seen lower fees. While some users are willing to embrace another coin, it seems that overall less buying and sending is taking place in the crypto markets.

Of course, the likely solution — a reliable, low-cost transaction — rests with innovation. Most Steemians have probably heard of the Lightning Network and its promise to lower fees and increase transaction speeds. Other solutions may find their way into the market as well. On the other hand, fees could re-emerge as the popularity of cryptocurrency grows even more in 2018. As for now, that's the lowdown, and we’ll have to wait and see what's ahead …

To read the full article at Coindesk, click here.