Transaction fees, a bugbear for a lot of in the bitcoin community, are on the way down. Spiraling fees were a contentious issue that reached fever pitch in the twilight of 2017. But with the dawn of a brand new year, bitcoin has been blessed with reduced fees, set against a backdrop of increased Segwit adoption.
Fees Have Halved from Their December Peak
After spending the final quarter of 2017 ramping up, transaction fees on the bitcoin network have finally begun to decline. Bitcoinfees.info indicates an average fee of ₦5731.77($15.79) to have a transaction mined within the next six blocks, rising slightly to ₦6004.02 ($16.54) for the next three blocks and ₦6276.27 ($17.29) for the next block. The median withdrawal fee from exchanges such as Bitfinex this week has been closer to ₦5082 ($14) however.
While ₦5731.77-₦6004.02 ($14-$16) is still more than many people would like to spend, it’s an improvement at least over the ₦10,890 ($30) bitcoin fees that were reached during December. Estimatefee.com quotes an average of 358 satoshis/byte to move a transaction within the next six blocks. The number of transactions in the mempool waiting to be confirmed is now below 90,000, from a peak of over 115,000 on December 30.
Fees Have Halved from Their December Peak
After spending the last quarter of 2017 ramping up, transaction fees on the bitcoin network have finally begun to decline. Bitcoinfees.info indicates a typical fee of ₦5731.77($15.79) to have a transaction mined over the next 6 blocks, rising slightly to ₦6004.02 ($16.54) for another 3 blocks and ₦6276.27 ($17.29) for another block. The median withdrawal fee from exchanges such as for instance Bitfinex this week has been nearer to ₦5082 ($14) however.
While ₦5731.77-₦6004.02 ($14-$16) continues to be significantly more than many investors wish to spend, it’s a noticable difference at least on the ₦10,890 ($30) bitcoin fees which were reached during December. Estimatefee.com quotes on average 358 satoshis/byte to maneuver a transaction over the following six blocks. How many transactions in the mempool waiting to be confirmed is currently below 90,000, from the peak of over 115,000 on December 30.
More BTC Wallets Add Segwit Support
Within the last 24 hours, Localbitcoins.com and BTC.com have added Segwit support for their wallets. In a blogpost, mining pool and bitcoin wallet provider BTC.com wrote: “As a BTC.com wallet user, you’ll experience a decline in the transaction fees and faster transaction instances when you return bitcoin to a different address.” It has added this functionality to both its mobile and desktop wallets.
Peer-to-peer exchange and online wallet Localbitcoins.com has additionally followed suit. The website has employed many poeple extensively in countries as diverse as the Dominican Republic and Poland, and has reached record weekly trading level of almost ₦50.8 Bln ($140 million) in the US. It may take some time before recent Segwit adoption by wallet providers filters through and impacts upon average bitcoin fees throughout the network. Segwit adoption is around 11%, showing there’s still a lengthy strategy to use ahead of the scaling technology nears universal adoption.
As usual, the topmost absentee from Segwit is Coinbase, that has yet to formalize plans for introducing the Segregated Witness technology. CEO Brian Armstrong seems to be more enthusiastic about experimenting with ethereum Dapp browsers, much to the chagrin of numerous Coinbase users. Bitcoin pioneer Nick Szabo, meanwhile, has been urging the community to favor Segwit, endorsing a Whalepool tweet listing Segwit wallets.
2018 The Year of Cheaper Fees?
Bitcoin fees are likely to remain a hot topic throughout 2018 as efforts to lower the median cost of transacting the decentralized currency intensify. With the Lightning Network now having been successfully tested live, there are hopes that the off-chain scaling solution could be introduced sooner than initially expected, bringing with it the prospect of lower fees for all.
The high cost of sending bitcoin has forced many to look elsewhere, either to bitcoin cash, with its famously low fees, or to other altcoins which can be sent for less than a cent in many cases. In bitcoin’s earliest days, when blocks were empty, it was equally easy to complete low-cost transactions. The cryptocurrency markets are no exception to Metcalfe’s law, however, and should any altcoin start to approach the size of the bitcoin network, it will succumb to the same problem: a growing number of users trying to use a resource that can only process a finite number of transactions per second.
If “Bitcoin City” remains the largest of cryptocurrencies, Kleiber’s law suggests that over the long run it will be the ecosystem where resources are allocated in the most efficient way.
Fees and transaction times are still higher than desired, but if Kleiber’s law applies, it’s only a matter of time until the bitcoin metropolis becomes a model in city planning.
Do you think bitcoin fees are still too high? Let us know in the comments section below.
Images courtesy of Shutterstock, Segwit,party and Bitcoinfees.info.