Bitcoin Lightning Network: Instant Transations & Minimal Fees (Part 1)
Hey fellow Steemians! Have you tried the BTC Lightning Network yet? I'm sure many of you have heard about it on May 25th, Bitcoin Pizza Day. If not, feel free to read my post from earlier: https://steemit.com/bitcoin/@cytowarrior/happy-bitcoin-pizza-day-man-pays-10-0000-bitcoins-for-2-pizzas.
To recap, someone paid 10,000 Bitcoins for 2 large pizzas on 8 years ago. To "recreate the moment", he bought another 2 pizzas, but this time he paid 0.00649 BTC through the Lightning Network.
Image Source
Firstly, I would like to discuss about the history of Bitcoin transactions. I have taken screenshots of graphs from the blockchain.info website. It has very helpful tools for you to analyze changes in Bitcoin. You can also create your own Bitcoin wallet there and buy/sell your cryptos.
From the graph above we can see the rapid increase of BTC transaction fees. These fees can really eat up your money.
This second graph shows the average block size from 2009 to today.
The last graph shows the average number of transaction per block.
So....what does all of this mean? Well, I didn't spam screenshots of graphs for nothing. We can see that over the years Bitcoin has grown more and more popular. As transactions and block size increases, so does transaction fees. Transactions with a higher fee tend to go through faster than the ones with lower fees. If the fees are too low, your transaction might even get stuck. There are ways around it, but that's a story for another time.
Displayed in the image above are information of three recent blocks.
A block of 372.34736392 BTC with a size of 1138.811 kB costed 0.1945612 BTC in fees.
A block of 579.4091187 BTC with a size of 1145.351 kB costed 0.29985012 BTC in fees.
A block of 1,558.94534657 BTC with a size of 391.941 kB costed 0.09198797 BTC in fees.*
*Why does this the transaction fee of 1,558 BTC cost more than a transaction of 372 BTC?
Transaction fees depend on the size of the transaction. The size increases as there are more inputs and outputs in the wallet. This is the same reason why it's not smart to accept/send micropayments with your regular wallet, and that's also one of the reasons why the Lightning Network is so awesome.
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"Bitcoin Lightning Network: Instant Transations & Minimal Fees (Part 1)" is mainly about transactions and blocks, don't forget to check out my future posts. Thanks! :)
I just want to hear when Lightning Network starts working and people are using it, I waited too long~
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