Topic: [2017-09-29] Paying $15 to Send $25 Has Bitcoin Users Rethinking Practicality (Read 6262 times)

I understand what they are saying but I think it's still to soon for that. Bitcoin right now is being used more as an investment. I know it was suppose to be used as currency and facilitate payments etc, but right now it's used as a store of value like gold, so the fees are not that important right now. Everyone says the network needs to mature a bit more, before it can get mass adoption and be used for small transactions, and I agree with that. The lightning network will surely help, and maybe the blocks will get bigger in the future, but now is not the time.

Also the price is still to volatile right now, so whats the points in spending bitcoin with small transactions? It's just not worth it, and i don't think that solving that problem should be a priority right now. In time we will get there, but right now I think users should just buy and hold.

This is a pre fork article. The writer obviously doesn't follow the crypto scene. He just went in 3 or 4 months ago and saw transactions piling up and fees of $1 making you wait 2 or 3 days for a confirmation. He doesn't know that the network was being spammed by BCC activists and it stopped after the fork.

he took the highest ever fees in history in August,once there was huge network spam and
average per byte was over 380 satoshi and then manipulated the users into believening that sending
a 25$ from coinbase is more expensive than WU or PayPal transfers
the lower the amount of money transferred through the blockchain,the higher the relative % fo the total
while with the larger sums it is way cheaper and faster to use blockchain
I have been sending coins with 16000 satoshi fees lately,which is around 60 cents,so both Western Union and PayPAal can only dream about this sort of fees
to summarize-yet another manipulative fud article

Complete FUD again. Has this shithead done any research at all or is he simply sucking fees from thin air? Try sending say

$100 000 to someone in another country and see if it is cheaper or more expensive than Bitcoin. This statement is proof :

"Bitcoin is now in a situation where the fees are very high and are likely to continue to increase, so it’s not even competitive with PayPal or Western Union in most cases," Charles said in a phone interview. "

Yes, micro payments were expensive a few months ago, but I can send a few dollars to anyone in the world for a few cents

now, using Bitcoin

On one hand, I feel that businesses who want to use Bitcoin need to understand better how fees work, how to make inputs more efficient, how to keep transactions to a minimum, how to use batch transactions, how to take advantage of network congestion, etc. I made all the newbie mistakes. Withdrawing multiple times from faucets (creating a lot of dust inputs), not planning deposits in advance (requiring immediate transfers with high fees when network is congested), for example.

On the other, if Bitcoin is touted as an alternative payment method and if it hopes for smaller SMEs and merchants to adopt it, if it needs propagation across economies, then yeah, it has to scale. And it already is addressing this.

Blockchain is revolutionary new brand way for money transactions. It's fast and cheap. That's why banks are against bitcoin and other crypto-currencies. Bitcoin is a danger to all of them.
I really don't know where have you met such big transaction fees. But I'm agree, if you don't have another way - try with bigger sums of money.

High commission fees for a transaction are one of the largest available shortcomings of bitcoin for transfers of small amounts of payments. Therefore, bitcoin is increasingly seen as a means of accumulation, like digital gold, and not as a means of payment for the needs of hunger. Perhaps this will remain a feature of bitcoin, which, in this case, will be used for large payments. However, it's bad that now, to work with a significant part of the altcoyins, they need to be transferred to better known ones, such as the ethereum or the same bitcoin, for making payments, and only then carry out the transfer itself.

Another shitty article making it look like fees are killing bitcoin economy.
I've just checked https://bitcoinfees.21.co/ and for a 1 block confirmation you have to pay around 30000 satoshis. This is 1.3 USD at current prices.
On top of that you are by no means forced to pay this much. You can cat it by half and pay 15k satoshis (0.65USD) for a 3 block confirmation, which will make you wait up to an hour. That's not much, provided that you can send money abroad at any time of the day.

The transactions do not cost over $2!

It "is bitcoin???"  the same way that "namecoin" "is bitcoin?"

Most of the alt coins are copies of bitcoin with tweaks... what's so special about bitcoin cash for you to say that it "is bitcoin???"

Bitcoin Cash has improved characteristics compared to bitcoin. Therefore, many people use it. They trust this coin because it is Bitcoin, not alternative coins. I hope that soon bitcoin original will also be better

Of course do altcoins have lower transaction fees ~ there is barely any actual network usage over there.

If we look at the main reasons for the fees to have increased significantly, then the spam attacks being initiated by poisonous entities supporting big blocks are the main cause ~ it's in their benefit to make Bitcoin look bad.

I find it quite funny that people are actually considering to make use of a severely obsolete altcoin such as Bitcoin Cash. If you look around, there are enough alternatives that offer much better functionalities than Bitcoin Cash.

I am not sure with PayPal, but bitcoin is better than Western Union, bitcoin has low fees.


Current network transaction just need 10-30 minutes to get confirmed, not days. https://blockchain.info/unconfirmed-transactions


It doesn't make sense at all, I just paid $0.5 fee to send $1500 on my last transaction, and it get confirmed after 28 minutes.

Only small part of those described fees are Bitcoin network fees. It's true that sometimes miner fees are too high, usually during a spam attack, but it's rare and it can be solved. But saying that bank fees are somehow equal to Bitcoin fees is completely wrong and dumb - Bitcoin was actually created to remove middleman with all those fees and instead have only one flexible miner fee. Also, it's incorrect to buy small amounts of Bitcoin each time you want to make a payment - it's much more efficient to buy a big amount and than spend it from time to time - if there are fixed fees, you will pay them only one time.

Ryan Charles recently switched his business, the social platform Yours Inc., from using bitcoin -- simply because he couldn’t afford it.

Fees for sending money over the distributed-ledger network have risen nearly 19-fold, from 13 cents per average transaction in the second quarter of 2016 to $2.40 in the same quarter of this year, according to researcher CoinDesk. While they’ve moderated somewhat since, the fees still undermine the San Francisco-based company’s business model, which is built around writers receiving small payments from readers of their posts.

"Bitcoin is now in a situation where the fees are very high and are likely to continue to increase, so it’s not even competitive with PayPal or Western Union in most cases," Charles said in a phone interview.

When bitcoin debuted in 2009 it was hailed as a technology that would revolutionize the world of finance by making micro-payments practicable, and international money transfers cheaper than Western Union Co. In some cases, particularly in low-value transactions, fees to run payments over the blockchain technology based network can actually be higher.

The fees go to so-called miners, whose computers run the software that makes the network tick. Miners didn’t suddenly raise prices. The bitcoin blockchain is a supply-and-demand-driven system. When there’s lots of demand, users have to pay higher prices for transactions to post fast. They can pay lower fees, but then the payments will get a low priority, and postings could take days. Most consumers don’t even know about the low-cost option: They simply pay fees imposed by what are known as wallet companies that facilitate transactions. And fees have been spiking often.

That’s making bitcoin impracticable for many people. Nearly 60 percent of the world’s bitcoin owners hold less than $4 at current prices, according to BitInfoCharts. At the recent average of $2.46 per transaction on the bitcoin blockchain, the fees would swallow most of the funds. On Aug. 22, the average transaction fee was $8.90, according to Lucas Nuzzi, senior analyst at Digital Asset Research.

For many companies hoping to do commerce via bitcoin, the fees are prohibitive, especially in emerging economies like India and Vietnam, where consumers often earn a few dollars a day. Even U.S. residents can feel the burn. It can cost as much as $15 to send $25 from the U.S. to a bank account in the U.K. via bitcoin, or three times as much as using Western Union, Nuzzi said.

"It’s very cumbersome and complicated,” said Khalid Fellahi, head of Western Union Digital in San Francisco. “We haven’t seen that today being an alternative to what we do.”

To send the $25 from the U.S., Nuzzi used a credit card to buy an equivalent amount of bitcoin on exchange Coinbase Inc., which charged a 3.99-percent fee this month. Then he paid a bitcoin network fee of $1.34 to send the payment to the U.K. While converting bitcoin to pounds was free on the exchange Coinfloor, Nuzzi had to pay $13.56 to place the money in a U.K. bank account. He ended up paying $15.90 to get the payment through.

Granted, some users don’t convert to a fiat currency, and transact in bitcoin directly. But even those users would pay fees to miners.

"Bitcoin cannot be used properly for commerce when a transaction costs more than $2," said Shaun Chong, lead developer of mining community Bitcoin.com Pool, which makes between 10 percent and 30 percent more in revenue now that the fees are higher.

"If the fees were lower, the bitcoin price would be even higher because bitcoin would be more usable," Chong said, adding that in its current state, the network is "broken."

Read more: ICOs explained -- a QuickTake

There are several reasons why network fees are so high. Many startups have been requiring investors to pay in bitcoin for Initial Coin Offerings. Since those were often only open for a limited period of time, investors sped up money transfers to avoid missing out, pushing costs higher, said Nuzzi.

What’s more, as bitcoin’s profile rose, the network often got overloaded. With demand high, and supply short, transaction prices went up.

Some of the fees may decline in time. Developers are working on different ways of expanding the network’s capacity, with one major fix implemented in late August, and another due in a few months.

But bitcoin developers remain split over how to improve capacity. Already, some of them decided to create and run a separate bitcoin-like digital ledger called bitcoin cash earlier this year. And another split off could be coming in November. Even if the most promising solution, called Lightning Network, is implemented, fees could remain high as demand increases, said Charles. That’s why he switched to bitcoin cash, which charges lower fees.

"We see bitcoin losing market share in comparison to other currencies if more events like that spike network fees," Nuzzi said. There are around 1,000 digital currencies and nearly all of them charge lower transaction fees than bitcoin right now. So some entrepreneurs and users are moving to litecoin, bitcoin cash or ethereum to find better prices.

"Bitcoin has a lot of value in terms of moving large amounts of value using digital currency," said Jeremy Allaire, chief executive officer of cryptocurrency exchange operator Circle Internet Financial Ltd. "The fees don’t matter when you are dealing with larger transactions. If you are using it for a $25 transaction –- then yeah, the fees would be too much."

As transactions get more expensive, perceptions of what bitcoin is are changing, too. Because there will only ever be 21 million bitcoin issued, it’s considered to be a scarce resource that investors can park money in, hoping for appreciation. Already, bitcoin’s price has nearly quadrupled this year, despite pressure from Chinese regulators.

"It’s forced bitcoin into moving away from being a cheap payment system to being a store of value like digital gold," said Anthony Di Iorio, founder of digital wallet provider Jaxx.

https://www.bloomberg.com/news/articles/2017-09-29/paying-15-to-send-25-has-bitcoin-users-rethinking-practicality