Bitcoin fees have been rising significantly over the past year and a half. Fees have risen to over $1.00 in some cases for a normal transaction, and that still doesn’t guarantee the fastest confirmation. This week one bitcoin observer noted on Reddit it’s likely that 55.2 percent of addresses don’t have enough funds to cover current fees.
Are Rising Fees Creating Unspendable Addresses?
As Bitcoin.com reported last month, bitcoin transaction fees have increased by more than 1200 percent since 2015. To many bitcoin proponents, the current fee market is moving way too fast, making bitcoin unusable for certain transactions. Over the past six months, transaction fees have increased exponentially, and the rising fee market doesn’t seem to be slowing down.
The fee market and slow confirmation times have also increased the tension concerning the block size debate. There are those that believe rising transaction fees and $100 per transaction is fine. However, if there are wallets with low amounts of bitcoin that can’t cover the fees, they become virtually unspendable. One Redditor suggests the amount of small unspendable addresses are probably larger than many think and may amount to millions of dollars worth of unspendable bitcoins.
If an address had ten Unspent Transaction Outputs (UTXOs) and each one is only 10,000 satoshis, then the address balance is 0.001 BTC. Which would make it seem spendable but in reality, it’s not because signing ten inputs makes the transaction too large to be confirmed for a fee less than 0.001 BTC. And some addresses with a large balance will have some small unspendable UTXOs, so their real spendable balance is actually less.
No One Was Sent the Memo That Coffee Purchases and Voting Mechanisms Are Spam
The contention in the community has created many different topics on how to best scale bitcoin. A user-activated soft fork (UASF) has been widely discussed for Segwit activation, and some industry members believe the process is controversial. Bitcoin Unlimited (BU) has been gaining significantly more hashrate as some believe it’s the best way to proceed. The large mining pool Antpool has just recently mined blocks signaling BU support.
Then there have been heated debates concerning what you can and cannot use bitcoin for, like buying coffee or some types of micro-transactions. Just recently an announcement was made by a voting organization who explained a stress test was to be performed on the Bitcoin blockchain on March 6. The Reddit announcement states, “Over 1 million votes per minute will be anchored to the Bitcoin blockchain, for a total of approximately 1.5 billion votes over the 24 hours. This will take place through approximately 11,000 transactions over 24 hours. This is about 4 percent of Bitcoin’s capacity so may cause increased confirmation times and/or fees.”
The topic had caused immediate controversy regarding whether or not people have the “right to use the network in this way. Bitcoin developer Lukejr considered the stress test a “spam” attack and expressed his opinion that the act of processing that many transactions should be illegal. In fact, Lukejr states that he reported the issue to the Australian cyber-crime agency.
“We’ll see,” explains bitcoin developer Lukejr. “It’d likely be under cyber-crime laws (it’s a DoS attack), not spam laws. I’ve reported you to the Australian cyber-crime agency. Hopefully, they will act to stop you before your attack.”
The Rising Fee Market and What is Considered ‘Spam’ Probably Should be Addressed Soon
Many hope the debate can come to a compromise on both sides, but there are many different wheels turning on how to best proceed with scaling. There is a significant disagreement on what you can use bitcoin for and polarized opinions concerning the rising fee market as well. What is clear is that many people are considerably unhappy with high fees and slow confirmation times and some believe it is hindering the digital currency’s growth. If there is a significant amount of unspendable addresses and there are certain rules to how you can utilize a decentralized cryptocurrency, then the issue should probably be addressed as soon as possible.
What do you think about the rising fee market and unspendable addresses? Do you think there are certain transactions that bitcoin should not be used for? Let us know in the comments below.
Images courtesy of Reddit, Twitter, the Bitpay blog, and Shutterstock.
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