Mark Cuban, a billionaire investor and the owner of the NBA’s Dallas Mavericks, has confirmed that his organization will begin accepting Bitcoin for tickets starting next season.
— Joseph Young (@iamjosephyoung) January 16, 2018
In response to inquiries from Bitcoin users and supporters on social media, Cuban stated that beginning next season, the Mavericks will sell tickets to its games using Bitcoin.
Bitcoin For Large Payments
Evidently, the Bitcoin blockchain network is currently congested and its transaction fees are too high. Erik Voorhees, the creator and CEO of ShapeShift, noted that Bitcoin is not usable for small payments under US$100 as of now.
“Fees are too high on the Bitcoin network. It doesn’t make sense to enable orders below $100-$200 unfortunately,” said Voorhees, responding to requests from ShapeShift users to lower Bitcoin’s minimum deposit threshold on the ShapeShift digital asset exchange.
As the developers of BTC.com explained in a recent blog post, however, Bitcoin’s transaction fees are not affected by the amounts being transacted. Rather, a transaction fee on the Bitcoin network is determined by the size of the transaction that analyzes the inputs and outputs of the transaction.
On the Bitcoin network, it costs the same amount to send US$100 or US$1,000,000. Hence, it is very efficient to utilize Bitcoin in processing large payments, because traditional money transfer methods provided by banks and financial institutions are significantly more expensive.
“Despite the common misbelief, the amount of bitcoin you send does not impact the fee. What impacts the fee is the size of the transaction data. Without going into details, when users receive many small transactions frequently, the size of their transactions tend to become larger,” said the BTC.com development team.
According to TicketMaster, the official ticketing partner of the NBA, single game tickets cost up to US$1,500, depending on the seat.
For tickets above US$200, utilizing Bitcoin as a payment method can be efficient, as Bitcoin fees for medium-size transactions are around US$11. On SegWit-enabled wallet platforms with systems like transaction batching implemented, fees can be reduced to below US$5. Thus, by using SegWit-enabled wallets like BitGo and BTC.com, Dallas Mavericks fans will be able to purchase tickets with relatively lower fees than they would otherwise.
Will Bitcoin Fees Remain High?
In the absence of on-chain scaling, given that the integration of Lightning by commercial platforms like Blockchain and Coinbase could take many months – considering many of the largest companies in the industry have still not implemented SegWit – the transaction fees on the Bitcoin network will likely remain high in the short to mid-term.
That being said, the market is anticipating the emergence of payment channels that could allow users to settle micropayments or small transactions with substantially lower fees. Second-layer payment channels can be especially useful for small purchases, such as US$9 tickets to Dallas Mavericks games.