In the cryptocurrency world, transaction fees can make or break any project. While some projects try to maintain a zero-fee transaction structure, the vast majority of them tend to charge a small amount for miners to include transactions in blocks. As such, there are some concerns over the current rise in Bitcoin transaction fees. It would appear the VeriBlock project may be [inadvertently] contributing to this rise in fees.
Why are Bitcoin’s Transaction Fees Rising?
It is never a good sign when Bitcoin becomes more expensive to move across the network. Anyone who has been involved in cryptocurrency for quite some time now will have noticed Bitcoin is often subject to transaction fee controversy. The world’s leading cryptocurrency isn’t cheap to move around the world, although it is still cheaper than most of the mainstream alternatives. Even so, it is still worth keeping an eye on these fees and how they evolve, as it is not hard to see why some users express their concerns.
When looking at BTC fees chart for the past three months, a very peculiar trend has emerged. Throughout most of Q1 2019, the transaction fees have remained near the same level. While there has been a slow and steady rise on certain days, it seemed as if the situation was under control without any real problems. These costs fluctuate just like the Bitcoin price, which is only to be expected. However, in the past few weeks, the fees have seemingly spiraled out of control in rather quick succession.
Bitcoin's daily tx fees are up 500% since 2019 began
📈 pic.twitter.com/89o5xqzXkd
— Kevin Rooke (@kerooke) April 1, 2019
When looking at the big picture, the transaction fees currently on the network are a near 500% increase compared to January 1st. Although such a temporary increase in costs would be easy enough to explain, it appears this “problem” has been in place for several weeks. Thankfully, it would appear the peak in fees has already passed, and things are slowly returning to normal at this time. Â Even so, finding an explanation for this sudden increase is a bit challenging.
Several theories are floating around at this time. Some users are eager to point out the recently launched VeriBlock service may be a possible culprit. More specifically, this service writes transactions on other blockchains to a Bitcoin block, which means there is less space to include transactions in said block. It is possible this will cause a spike in fees, as the service claims over 6 million security transactions have been written to Bitcoin’s blockchain to date. A very spectacular amount, although it may only be part of the recent fee rise problem.
Another possible explanation is how more people are moving Bitcoin across the network in general. Again, that may explain a few brief spikes, but it seems the overall trend in terms of value transferred has been the same for several weeks. This increase in costs has not prevented the most recent Bitcoin price uptrend, however, which further confirms a lot of people aren’t too bothered by the cost of sending a BTC transaction at this time. For a project which aims to become the “future of money”, however, bringing the fees down would not be an unnecessary luxury.
As is always the case when discussions like these take shape, there will be people who will gladly point out how “coin X” is vastly superior. While that may be the case, they don’t come close to Bitcoin in terms of appeal, recognition, and branding. Keeping that in mind, it remains to be seen if this temporary rise in transaction fees is something to be overly concerned about. Finding a solution to ensure incidents like this become less frequent would certainly be appreciated, but it will take a lot of time until that happens.
Disclaimer: This is not trading or investment advice. The above article is for entertainment and education purposes only. Please do your own research before purchasing or investing into any cryptocurrency.