According to Diar's latest report, bitcoin transaction costs soared by 250% in April, due to the fact that bitcoin trading volume continued to rise, almost the same as December 2017 when Bitcoin was $20,000.
SEGWIT significantly reduces transaction costs
However, given the steady development and use of Segregated Witness (SegWit), today's transaction costs are much lower than at the end of 2017. Diar wrote in the report:
- Seed CX tests physical settlement of bitcoin swap contracts, scheduled to launch within three months
- Xiao Lei: Bitcoin once again broke through 10,000 US dollars. Is it a scam or a revolution?
- I handed him 600 bitcoins, and he committed suicide last week.
- 35 days rose 113%! Can Bitcoin break through the $10,000 mark and can still get on the bus?
- Frequent news on the regulatory level, Iran is in urgent need of compliance with Bitcoin mining business
- Does Bitcoin achieve true decentralization?
The price of bitcoin rose by 43% in April, and the trading frequency of traders increased. The amount of trading on the chain that the exchange relied on was the source of the surge in transaction fees. However, the scalable solution SegWit has an average usage rate of 35%, which reduces the cost pressure. In 2018, the average usage rate of SegWit is 26%, and the usage rate of Bitcoin peak is only 11%. This shows that SegWit is favored by the main players in the market and the adoption rate continues to increase.
Despite this, Bitcoin transaction fees have increased by 250% from the previous month, and Bitcoin miners have earned a total of nearly $14 million in transaction fees.
Separated witness wallets and services reduced the cost of delivery as expected. More and more people will seek low fees, so the adoption rate of segregated witnesses will gradually increase. When the transaction footprint becomes smaller, the cost per byte may be lower, and then the average transaction cost is reduced. In the future, more and more users will use lightning network and other methods to save valuable satoshis.
Improve bitcoin efficiency
Users who want a faster confirmation of a transaction will typically pay a higher fee to process the transaction faster. The more people do this, the higher the average cost.
Diar estimates that if the volume of transactions continues to increase, transaction costs will be about 55% lower than the peak of the previous transaction. At the same time, the frequency of movement of cryptocurrencies will become more and more.
In addition, the use of lightning networks is also growing. According to 1ML data, the number of lightning network nodes has increased by 5%. Toronto is the city with the most nodes, with 107 and more than 1,200 channels. Lightning Networks can transmit more than 1000 bitcoins in seconds.
Currently, the latest block number is 575,003, a total of 2,500 transactions have been sent, and a transaction fee of more than $3,200 has been charged. The average transaction cost per transaction is slightly higher than $1.25. Some transactions cost more than $17, while most transactions cost less than $2. Some even use as little as 50 cents, but these transactions may take a while to confirm.
While Bitcoin transactions and transfer costs are much higher than other cryptocurrencies such as bitcoin cash, scalability technology can reduce costs, which is a positive sign for Bitcoin.