Is Bitcoin heading towards its own doom?
The question seems more valid each passing day as the digital currency’s
transaction costs continue to increase owing to the overcrowded network.
Bitcoin was pitched to the community as the future of global economy — the
digital currency that can bank the unbanked, enable microtransactions and make
remittance a walk in the park. All these claims hinged on a single property of
Bitcoin — negligible transaction fees.
The growing Bitcoin community has
started to find the pitch to be full of false promises. Thanks to the lack of
serious scalability solutions, the cryptocurrency network is flooded with
unconfirmed transactions, causing delays. An average transaction now takes
anywhere between one to twelve hours to get confirmed. The increasing demand
for faster transactions has also led to a drastic rise in the miner fee
associated with each transfer.
The growing miner fee has left
Bitcoin unfit for microtransactions. The cryptocurrency community, feeling
helpless about the current situation is venting its frustration on the social
media about increasing cost of transactions. In a recent post on Reddit, one
user complains about paying a fee of 23 cents for a $3.74 transaction. The post
has received comments from others expressing similar views about the transaction
costs and delays on Bitcoin blockchain. Few community members have also
expressed their opinion about Ethereum as an alternative to Bitcoin for value
transfer.
“Just paid 23 cents on
a $3.74 transaction. When does it end? $1.00 per transaction? $2? $5? I don’t
wanna stop using this peer to peer currency, but I’m fast being priced out of
it.”
A look at the Bitcoin mempool
statistics shows a constant lag of at least 50,000 transactions at any point of
time. In many instances, the number of unconfirmed transactions grows beyond
400,000, creating a huge backlog. At this rate, without the developer
community’s intervention, Bitcoin could start losing users to other
cryptocurrencies. Also, people may soon start finding conventional fund
transfer costs to be much cheaper than Bitcoin transactions.
Right now, one can only hope for the
developer community to come up with few quick fixes that can at least
temporarily resolve the issue plaguing transactions. Once they have the
temporary fix in place, they can continue developing a much stable, scalable alternative
for eventual implementation.
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