Bitcoin transaction fees are up 1289% since March 2015 as Bitcoin transaction volume in 2017 approximates $250 million per day or about $180,000 per minute. That represents a 55% increase over 2016 and 173% over 2015. Bitcoin has added $10B to its market cap over the last year and currently processes three transactions per second.
While Bitcoiners aren’t paying for bitcoin transactions like they did in May 2016, when bitcoin transaction fees peaked, 171 bitcoins in fees still went to miners on February 15. Yet the Bitcoin network continues to grow, transacting upwards of half-a-billion USD so far this year. Bitcoin’s 30-day moving average has moved towards the $1,000 mark.
The peer-to-peer (P2P) bitcoin exchange, Localbitcoins, has seen steady growth throughout its existence, with reports of increased demand for P2P trade where there is economic turmoil or capital controls.
“[Localbitcoins] grows at quite steady, predictable pace,” founder Jeremias Kangas tells Bitcoin.com. “In some countries where inflation is high with big differences in currency exchange rates – like Nigeria, Venezuela and others – the rate at which bitcoins are exchanged can be quite different from what the official rates into fiat are. So, bitcoin might be a more and more relevant tool to get the actual value of a specific currency in the future.”
Some call Localbitcoins volume “light” overall but note it’s showing strong growth.
The increased demand, though, has pushed Bitcoin up against its block size limit.
This has resulted in a two-tier bitcoin transaction process wherein miners consider high transaction fees high priority and low transaction fees low-priority.
Underpaid transaction fees can result in bitcoin transactions stalling. At the time of writing, there were more than 67,000 such transactions backed up in Bitcoin’s mempool, which helps the network record transactions.
Many online exchanges handle transaction fees themselves so their users enjoy high priority transaction speed. Those who host their own clients, however, could see a bitcoin transaction held up.
The most important indicator of transaction fees is how large that fee is when compared to the amount of space a transaction comprises on the blockchain. Called ‘fee/size’, this measurement is taken in satoshis per byte. Bitcoin transactions comprise on average around 226 bytes of space. The current fee level for a 3 block wait transaction confirmation time is 100 satoshis per byte.
Thus, for a quick transaction, you must pay 0.00022600 bitcoins, or around 0,25 USD.
Once a transaction is sent, it can be monitored through a block explorer like Tradeblock or Blockchain.info. To find your transaction, you will need to know the transaction ID, often visible in a Bitcoin wallet’s transaction history.
21 Inc. has bought the service Cointape and rebranded it into a tool listing current estimated confirmation times for transactions based on different fee sizes.
What do you think about the current Bitcoin fee transaction environment? Let us know in the comments below.
Images courtesy of Shutterstock, Chris Burniske, Blockchain.info.
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