The year 2017 recorded an increase in bitcoin and bitcoin fees at the same time. The fees which used be lower than 1$ was not the same. Bitcoin transaction fees rose to $ 30 for median transactions and upto 50$ for higher transcations, making it impossible to send amounts lower than the fee except other wise. Starting on the 23rd of January, crypto africa noticed the fees seem to have return to normal and we had to check out the reason for this.
Why Bitcoin Fees?
Bitcoin miners are those who validate bitcoin payments(Confirmation) on the block chain. These miners use computers and the process require high electricity. These computers make up the network. If a miner successfully adds a transaction to the block chain network, the miner will be rewarded with bitcoin( new bitcoin created). The fees paid will equally go to compensate the miner for validating your bitcoin transaction.
Once all the 21 million bitcoins will be mined , miners will depend on the transaction fees, and the mining of other coins such as ethereum,Lite coin among others.
Why the Increase in The network Fee?
There are many factors that account for bitcoin fees. Some of them includes; the block size( measured in kilobyte) and,congestion in the block chain network.
*The larger the block size the higher the fees.
*The more congested the bitcoin network the higher the fee.
Best Bitcoin Fees for Faster Confirmations
When making a bitcoin transaction, consider making use of the following
i. Wait for unconfirmed transaction in the Meme pool to get lowered before doing a transaction. Do this when you are not in a hurry.
You can check this out on block chain Meme Pool here
ii. If you are impatient like me when it comes to transactions, then use the following websites to get the best fee for your bitcoin transaction.
There are many other sites that you can use to get fees. These ones are cryptoafrica’s recommendations.
One other way to go without the fee calculation is by using wallets like blockchain.info and selecting higher priority fee when sending Bitcoin. Make sure you always use the option when the incoming transaction is not yet confirm( Spending an unconfirmed input transaction). We will cover more about bitcoin fees in the future.
Why are Fees returning to Normal and Even Below 1$?
The decrease in transaction fees is associated to three factors:
i. Adoption of segwit
SegWit is the short form for Segregated Witness. Segwit helps to limit the block size on the block chain network in increased by removing signature date from bitcoin transactions. Segwit was propose by bitcoin core and has the following benefits :maleability fixes,increase in security for multi signature transactions,scipt versioning. Segwit is a game changer when it comes to spending unconfirmed transactions. Segwit can help in saving upto 35% in bitcoin transaction fee. You can learn more about this on Bitcoincore.
Bitcoin wallet providers that support segwit will have lowered fees compared to those that do not support Segwit. We hope the popular wallet providers like blockchain.info,coinbase,paxful,electrum and others will adopt segwit to make bitcoin great again(MBGA) in terms of fees.
ii. Text Batching
This involves making a single transaction with several out puts. This means you can pay 10 people with just a single transaction. This single transaction will have 10 out puts like our case. You can save upto 80% fees by batching a bitcoin transaction.It is cheaper because you will have to pay just a single fee for making multiple transactions. Some wallet providers try to make this work with their wallet.
iii. The Lightning Network
”The Lightning Network is reliant upon the hidden innovation of the blockchain. By utilizing genuine Bitcoin/blockchain exchanges and utilizing its local brilliant contract scripting dialect, it is conceivable to make a safe system of members which can execute at high volume and fast”.  The bitcoin lightning network is another solution to the bitcoin scalability problem that relies on segwit. It allows people to do transfer bitcoin and other cryptocurrencies without broadcasting on the block chian network
The benefits includes:
#instant payments, #billions of transactions per second,
#low fees in bitcoin transactions and #cross-chain atomic swaps(instantly)
Mempool clearing up rapidly. 70-100 sats/byte txs are now processed on the next block. Higher #SegWit adoption + batching of txs + #LightningNetwork looks like the ultimate triple-punch combo. 🤛🤛🤛 🏆🚀#BitcoinIsScaling #bitcoin pic.twitter.com/sotYCK0ukG
— Armin van Bitcoin ⚡ (@ArminVanBitcoin) January 20, 2018
Will Mining be Profitable?
Mining will still be profitable . If the fees become lower it means the innovations mentioned above had been adopted. Te miners will thus be able to validate more trasactions in a short period of time. #MoreMoney.
What Next for Bitcoin?
The bitcoin Meme pool is still relatively high at the moment i am updating this post. The decrease in the transaction fee might no be permanent. Everything is possible with block chain and the crypto world. Innovations and updates are taking place every day. A lower fee will mean more transactions with bitcoin which will be beneficial to both miners and investors. Segwit cfan reduce transaction fee by upto 35%. The bitcoin transaction fees is one of the factors that let to the drop of bitcoin by 30%+ in just a month coupled with the FUD . Bitcoin might take its upward trend if the fees are kept low.
Do you see the Bitcoin transaction fee staying below 1$ in the next 24 months?