Bitcoin Fees Are Skyrocketing (arstechnica.com)

An anonymous reader quotes a report from Ars Technica: The cost to complete a Bitcoin transaction has skyrocketed in recent days. A week ago, it cost around $6 on average to get a transaction accepted by the Bitcoin network. The average fee soared to $26 on Friday and was still almost $20 on Sunday. The reason is simple: until recently, the Bitcoin network had a hard-coded 1 megabyte limit on the size of blocks on the blockchain, Bitcoin's shared transaction ledger. With a typical transaction size of around 500 bytes, the average block had fewer than 2,000 transactions. And with a block being generated once every 10 minutes, that works out to around 3.3 transactions per second. A September upgrade called segregated witness allowed the cryptographic signatures associated with each transaction to be stored separately from the rest of the transaction. Under this scheme, the signatures no longer counted against the 1 megabyte blocksize limit, which should have roughly doubled the network's capacity. But only a small minority of transactions have taken advantage of this option so far, so the network's average throughput has stayed below 2,500 transactions per block -- around four transactions per second.

Comments

As good an excuse ...

[CaptainDork]

... as any.

Too complicated

[Anonymous Coward]

Bitcoin is so complicated to use as an actual currency. The whole concept of it was that it would be easier and cheaper to send money around to people. I can send an international transfer these days for 12 USD and a 3 day wait period and that sucks. Bitcoin on the other hand is fucking ridiculous, you have to pay 26 USD, understand the concepts of how many megabytes of currency you want to transfer (fucking wat?!) and then even after all that it might take a week just to get your money anyway..

The worse part about it is it isn't any better than having money in the bank because you're money is held hostage to the whims of the developers that write the bitcoin code. So unlike Banks that have to abide by government regulations the developers of all the different bitcoin programs can get together and legally fuck you over in all sorts of ways.

Scaling to the real world?

[ColaMan]

I don't understand how Bitcoin and it's blockchain arrangement is ever going to be scaleable.

Currently we're running at a global rate of four transactions a second. Four. Just the everyday transactions at my local shopping centre would run above that rate.

How is this whole "ubiquitous Bitcoin economy" thing supposed to work again?

Re:Scaling to the real world?

[christophercole]

Agreed -- Bitcoin won't scale. It's already proving to be a very poor way to transfer small amounts of money. For example, last week, I sent $15 worth of BTC from one of my wallets to another. The default transaction fee was $7.50! Before sending, I overrode the suggested transaction fee and set it to the minimum amount, which was about about $1.50 -- that's effectively a 10% fee to move a small amount of money. I knew that opting for a lower transaction fee would result in a longer wait for my transfer to occur, but I was not in a hurry. I wanted to see what happened. Well, here I am 5 days later, and although the $15 is deducted from by source wallet, it has yet to show up in my destination wallet. And as long as there are thousands of other transactions around the globe paying higher fees, my money will forever be stuck in the ether. Bitcoin has proven to be: non-scalable, expensive, and unreliable.

Re:Scaling to the real world?

[Anonymous Coward]

you can double spend the coins with a higher transaction fee. the network will notice the double spend and remove the transaction not accepted into a block from the pool when the other is accepted into one

Re:Unclear Story

[GuB-42]

This isn't about exchange, it is only about bitcoin transactions, and the fees are in bitcoin. Converted into dollars with the current rate for "clarity".

The way transaction work is by telling the world "hey, I want to transfer 0.1 BTC to X, I give 0.001 BTC to the one (a miner) who makes if official (by committing it to the blockchain). You can chose how much you want to give, including zero, but those who give the most get priority. And because the system is overloaded, you need to give a lot just to be accepted.

We need a Bitcoin category...

[leonbev]

So we have the ability to filter the category from our Slashdot news feed! Seriously, I've never seen this much focus on a single subject since Apple product release days (back when Steve Jobs was still alive), except these stories have been showing up EVERY DAMN DAY for the past two weeks.

Can you PLEASE fix this, so Slashdot stops looking like "News about Bitcoin, and stuff I don't care about"?

Re:What will the effects be?

[LynnwoodRooster]

An awful lot of people are buying BTC with credit cards, and I would wager a large number of them are doing it with funds they don't have. Put $10,000 on your Visa, way 3 months, sell for 10X the amount and party! Right?

Re:What will the effects be?

[TheRealMindChild]

My theory is that it was created by a national actor with the intent of crashing national economies

That is simply ridiculous. It was an experiment. No one could have foreseen what it has become. Even with its original vector, the politics got in the way and totally changed the shape of the beast. To consider that it was created, KNOWING that it would hit this price point, that it would grow this large, that it would have these problems, that there would be this mania, is patently absurd.

No, it can scale!

[bussdriver]

Gold can not scale. Limited amount, it has to be verified and processed; that takes time and money to do. Ever look into gold? You pay overhead costs in actually trading in gold plus you have to pay to securely store and transport any sizable amount of it.

How did gold become the foundation of everything until the banksters finally took over?

Abstract trading; not actual gold exchanges done on top of the real thing. Also, money was created ON TOP of gold and that is where all the action happened.

When you see other kinds of money float on top of bitcoin then you will see it scale. I see no reason why it can not become a kind of digital gold as long as the encryption holds up.

Gold is and hasn't been worth as much as we've made it for centuries. We based a system around it and that made it valuable. It has a silly jewelry value but that isn't what made it so expensive.

With futures trading and bigger banks involved... interesting times are coming. (not exactly a good thing; it's more of a curse but it is not dull)