Bitcoin production halving is approaching, and transaction fees are starting to soar

Transaction fees on the Bitcoin network have tripled since last summer, and they continue to grow. According to the latest fee estimates from Bitmain, nearly 20,000 transactions are currently paying more than 35 cents in fees to be confirmed in the next block. The average transaction fee on the network is currently around 15 cents.

From the above chart, we can see that the current optimal fee for the Bitcoin network is 60聪每字节. Multiplying this by the average transaction size of 500 bytes, the average fee per transaction equals 0.0003 BTC, which is about 15 cents based on the current exchange rate.

Choose a higher fee

Few people are willing to go through the difficult calculation process mentioned above when making a transaction, so they will choose a higher fee, such as 150 satoshis per byte or about 35 cents per transaction. In addition, exchanges may add product costs when changing or calculating default fees. Some leading service providers set a higher rate. For example, OKCoin currently sets 0.0005 btc的费用per transaction, which is about 1.5 yuan.

Transactions are getting more expensive

Since last summer, Bitcoin transaction fees have continued to rise due to capacity constraints, which has led many companies to choose to abandon Bitcoin. The latest example is Ascribe , an intellectual property attribution company that originally intended to use Bitcoin's blockchain. However, Trent McConaghy, CEO of Ascribe, pointed out that Bitcoin's scalability issues made Bitcoin transactions expensive, so the company had to design its own blockchain, BigchainDB.

According to McConaghy, if a customer conducts 100,000 transactions per day, at 10 cents per transaction, that would cost $10,000 in transaction fees. He further noted:

“We found ourselves needing to pivot because we knew the Bitcoin blockchain couldn’t handle the transaction throughput we needed.”

The debate over Bitcoin scalability has been going on for a long time, but due to the delay in the release of Segregated Verification, the issue has been brought up again recently. Bitmain/Antpool co-founder Jihan Wu posted a tweet on April 29:

“Someone must really enjoy being the decision-maker on transaction fees.”

He then further complained: "A new Bitcoin user, confused by the slow Bitcoin network and transaction fee policy issues, (from WeChat group)."

In March, Blockchain.info CEO Peter Smith complained about the delays in bitcoin transactions, but so far, no solution has been implemented.

As a result, Bitcoin transaction fees are likely to continue to increase and crowd out more businesses and opportunities, which fuels the current blockchain hype and forces these businesses to build their own private blockchains.