Bitcoin’s market has been up and down the past few days. In a previous article The Merkle covered the top 3 reasons why Bitcoin’s is currently rising. Japan’s adoption, the attention received from the WannaCry ransomware, and The Flippening are just some of the reasons for Bitcoin’s latest price craze. However, there are also quite a few issues which are currently suppressing the cryptocurrency’s price.
Bitcoin has been suffering from full blocks for months now. There have been many discussions regarding possible solutions that can be implemented to solve that issue, ultimately allowing for more transactions to be processed. Everything from a gradual increase in the blocksize, to creating a fork has been proposed and evaluated.
All the different opinions effectively shattered the community into different groups all supporting a different solution. Most notably, Bitcoin Unlimited – an alternative implementation of Bitcoin – has a significant amount of supporters who want nothing to do with the original cryptocurrency.
Moreover, Bitcoin miners have also joined the debate, each using their resources to sway the outcome in their favor. For example, Jihan Wu – Bitmain’s owner – refuses to signal SegWit (a solution which improves Bitcoin blocks’ capacity).
By refusing this solution he is effectively stalling Bitcoin’s progress while simultaneously driving the price of altcoins. A perfect example of that is Litecoin implementing SegWit with absolutely no issues, and seeing a meteoric price rise shortly after, leaving Bitcoin behind.
As a result of the unsolved scaling issue, Bitcoin’s network is seeing a tremendous backlog. This results in a huge increase in fees, and in some cases a significant delay in processing transactions.
According to Tradeblock, there are currently over 156,000 transactions in the mempool. In laymans terms, that means there are over 156,000 transactions awaiting confirmation. On average, there are roughly 300,000 transactions per day. So assuming no more new transactions come in (which is impossible), it will still take the Bitcoin network over 12 hours just to catch up with the backlog.
The only wait to avoid waiting over 12 hours for your transactions to confirm is to set a higher than average fee. That fee has been rising exponentially over the past few years.
The combination of the high fees, along with the delay in transaction processing can be quite a turnoff for Bitcoin newbies. A few years ago you could get away with setting a 5 cent fee and your transaction would have gotten verified in the next block. Nowadays, even setting a $5 fee in some cases will create a stuck transaction which will remain in limbo.
May 15th was the last day where you could submit supporting evidence for the ETF review. The SEC will make a second decision any day now regarding Bitcoin ETF’s petition for review. After declining the ETF the first time, the application was appealed and a review was ordered. If the SEC approves Bitcoin after the review, there will be a massive price rally following the announcement.
Keep in mind though, that any ETF application has a right to the appeal. Furthermore, since it has only been two months since the first decision, which was declined because “Bitcoin’s market wasn’t regulated enough,” it is doubtful the agency will change their stance on the application.
Moreover, The Merkle conducted a twitter poll asking our followers if they think the SEC will approve or deny the decision, the result was almost unanimous. Vote to find out yourself:
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