Why Bitcoin Blockchain Network Transaction Fees Could Plummet

Why Bitcoin Transaction Fees Could Plummet

Transactions fees have been a point of discontent for many Bitcoin users. However, they are now on their way down. The issues of fees had reached their highest point towards the end of 2017. However, with the increased adoption of Segwit, these fees are on a downward spiral.

Fees Have Halved For Their Peak

In less than a month, Bitcoin transaction fees have fallen by almost half. It is estimated that transaction fees will be $15.79 for the next six blocks. They will then shift slightly to $16.54 for the next three blocks and $17.29 for the next one block. The median withdrawal fee at major exchanges has been about $14 for this week.

While $15 is still higher than most people would like, it is an improvement from the $30 high that it reached during the month of December. The number of transactions waiting for confirmation at mempool has dropped to below 90,000 from a high of 115,000 on December 30.

Segwit Support In Bitcoin Wallets Is Growing

In recent days, more Bitcoin wallets have begun to offer support for Segwit. In a recent post, BTC.com, which is a mining pool as well as a bitcoin wallet, stated that transaction fees would drop when bitcoin was sent to another address.

Peer-to-peer exchange and Localbitcoins.com, an online wallet, have also added this support. The site is used in countries such as Poland and the Dominican Republic. In the US alone, trading volume has hit as high as $140 million. However, it will take some time for the recent adoption of Segwit to filter through and have a major impact on transaction fees. Right now, Segwit adoption is only at around 11% despite its major impact on fees.

Coinbase Is Lagging Behind

Coinbase has yet to adopt Segqit. The CEO of Coinbase appears to have his focus more on ethereum Dapp browsers to the discontent of its users. Nick Szabo, a Bitcoin pioneer, on the other hand, has been urging the community to adopt Segwit, even endorsing a tweet that lists Segwit wallets.

2018 Could Be The Year Of Cheaper Fees

The issue of high Bitcoin fees is likely to remain an issue for much of 2018. This will see efforts to lower transaction fees intensify. One thing that is giving hope to those who want lower fees is the successful trusting of the Lightning Network.

The issue of high fees has forced many people to look elsewhere. Some have turned to Bitcoin Cash, or to other altcoins that offer even lower fees. In some cases, these altcoins cost less than a cent to send. However, it is worth noting that the same issues facing Bitcoin will face these altcoins at some future point. It is especially so if they manage to grow to the size of Bitcoin. This is because of Metcalfe’s law; as more people try to use a finite resource, fees rise.

However, if Kleiber's law on cities is applied, it will only be a matter of time before Bitcoin becomes the model in crypto coin planning.