The Bitcoin network has been congested for quite some time now, blocks have been full and the debate has been at a stalemate. As Bitcoin’s adoptions is rising, along with increased coverage in the media about the price breaking all time highs, the amount of transactions has been on the rise. This has contributed to an increase in the average fee paid as users need to pay more and more in order to get their transactions to confirm in a reasonable amount of time.
Developers and users have been long aware of the problem that faced Bitcoin when the amount of transactions exceeded the available space in the blocks. The mining fees will increase because more transactions are competing for the miners’ hash power.
While this is beneficial to miners, users have to pay higher transactions fees. That fee has been slowly rising until now, it finally has reached the level of an old school financial institution. Checkout this chart that shows the rise of Bitcoin transaction fees over the past 2 months:
Uh-oh! The average #Bitcoin transaction fee has exceeded $1! pic.twitter.com/SjZx5oHwv4
— Nikita Zhavoronkov (@nikzh) March 5, 2017
The good news is that SegWit activation is progressing along as the current amount of nodes signaling it is hovering right around 30%. Furthermore, as the development of the Lightning network and other similar solutions progresses we may be able to fit much more transactions in the same amount of space.
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