Bitcoin has had a volatile December, from reaching an all-time high of over $19K to crashing down more than 30%. There is no dearth of reasons for why the price for cryptocurrency has been falling, from blaming the recent the hack of South Korea’s cryptocurrency exchange Youbi last week, or simply an overall reluctance by many people and governments to accept the legitimacy of the cryptocurrency.
Another reason, according to a report by Seeking Alpha, is the rising transaction fees associated with the cryptocurrency. The fees may send users scuttling to altcoins, the report argues.
This report points to the fact that bitcoin’s transaction fees are 1,000 times more than other cryptocurrencies.
Jonathan Cooper, author of the Seeking Alpha report stated:
Transaction fees will continue to hinder Bitcoin adoption and provide a rough user experience for Bitcoin users. Specifically, Bitcoin costs far too much relative to other coins, even to the mostly identical Bitcoin Cash.
Perhaps the most problematic element of bitcoin’s high transaction fees, as pointed in article, is that it’s not based on the transaction amount, as one might logically assume — so, it doesn’t matter if an investor is putting in $50, or $2 million. Bitcoin’s transaction fes is calculated based on the transaction in bytes, meaning the number of wallets used to make the transaction.
This transaction fee was less than $1 in January this year. In December, the average cost per transaction was at least $33.30, according to Seeking Alpha. That’s a 3300% increase.
Fellow Bitcoiners, are you ever going to realize how problematic these fees are getting? Avg fees now over $40 per tx. A year ago avg fee was $4. A year prior, $0.40. Growing faster than price, and exponentially with usage. We just spent $4800 to move 15 BTC in one TX.
— Erik Voorhees (@ErikVoorhees) December 22, 2017
Furthermore, compare bitcoin’s transaction fees to other cryptocurrencies and the issue becomes even more evident.
Today, bitcoin is trading at $16,075 as of 12 PM ET, according to CoinBase.
Read Seeking Alpha’s full take the issue here.
To learn more about the latest developments in blockchain and cryptocurrencies join us on March 5-6, 2018 at the Parc 55 in San Francisco for Bank Innovation 2018. Click here to request an invitation.3 - Readers Like This Post