Topic: Will transaction fees get in the way of the bull run? (Read 602 times)

Many users but with a higher price we get the newer users and a large amount are going via the easiest route which is exchanges I guess.    I do agree hardware wallets are clearing quite nicely still on custom fees ( not immediate but I dont need that) and the various measures taken since the last bull run are acting as a positive now I think

The fees were very high during the last bull market and that did not stop it, so why it should be different now? I agree with you that we are going to see some crazy fees as the price of bitcoin keeps rising but that is to be expected and anyone expecting otherwise will be disappointed, but taking into account the huge profits that you can get during a bull market and that most of the time you will only need to make a few transactions to obtain those benefits I will say the returns you can get justify the transactions costs.

This can't be compared to 2017 so soon as then we couldn't see transactions with 5sats/byte getting confirmed while now even transactions with 2sats/byte get confirmed within few hours. Some transactions do take long but not weeks like it used to happen back then. With many users using hardware wallets, they can choose to pay a lower fee and unless the network is not congested, I don't see it as a major problem. Only exchanges would try to grab more dollars for users.

As we see until now the bitcoin unconfirmed transactions not grow and this maybe happen because people not put high fee or there is not a lot of transaction like on last bull run.

Interesting question.We have Segwit and Lightning Network(I don't personally recommend them,but they are an option),this means more options to do offchain transactions.I'm sure that this will remove some of the pressure over the blockchain and thus it will lower the chance of the transaction fees going up.I'm no expert by any means,by the way.

There are enough ways to get around excessive transaction (and exchange) fees that it probably won't make much of a difference at the macro level.

For example instead of withdrawing from an exchange in bitcoin, it is usually cheaper to convert to ethereum or a stable coin and then withdrawal. So if fees matter to you, then you can find ways to trade around it.

Well, transaction fees might become a problem at some point, but I think since lightning network has been implemented already in the bitcoin network, then what will just happen is that the increase in transaction fees is going to bring massive adoption of lightning network by projects, especially those who offer small services like payment for pizza and coffee in which people who make the purchase of this things will not want to spend so much money in transaction fees than what they spend in making purchase of coffee.

People will always find a way out to maneuver it even when the transaction fee increases, we cannot avoid it, the higher the price and congestion, the higher the transaction fee will become, but it is not every time within the hour that it gets clumsy.

I could remember during the last bull run when the transaction fee became very high, I and my friend usually wait for there to be decongestion before we try to make any transaction, moreover, the profit that will always climb our investment then will cause excitement that most people may not really feel it that much on their transactions.

The developers should learned from past experiences, fees should be taken care properly if we are aiming for more adoptions and usage in the future,any available system that will help  both businesses and users for more convenient ways to keep transactions being active from time to time.

If you check out the transactions done in the previous 1 month you will see that we had one day with 452 thousand transactions and one day with 439 thousand transactions, those are literally second biggest transaction day in history and fourth biggest day in transaction history as we know about it.

It means we already have seen a ton of transaction increase in the past month and the only reason why fee's get higher is that there would be more transactions in bitcoin and people would pay more to get theirs priority, if we have seen the second and fourth biggest in the last month and the fee's didn't go up like it used to in the past then how could be wondering if the fee's will get higher later on? We would need double the amount of transactions then the highest transaction in bitcoin history to even get close to previous ones which I doubt will happen.

Agreed 100%! LN is an absolute must, which is why hard forked altcoins like BCH and BSV are dead on arrival as competitors to Bitcoin, because they refused to do segwit and LN.

I see your point, I hadn't thought about that - using the LN in order to not have to store your bitcoin on an exchange in between trades.

I just typed up a lot more thoughts but deleted it haha. I do think that larger payments will make more sense on-chain, because LN fees are partially percentage based which means really big payments would actually cost more on the LN than on-chain, I suppose the fee markets will find an equilibrium where most payments have smaller fees on LN but the top few percent largest payments done on the network are cheaper to do on-chain.

I'm still curious just how likely it is that traders would move to using the LN instead of on-chain deposits. I suppose this could happen in the years to come, but it'll be a while since the LN is far from being ready for usage by most people. Which is why I worry a lot about when this bull run starts going crazy in the next couple of years, LN likely will not be used by the majority of people by then, so I think we will definitely see fees get way worse than they were at the end of 2017 (triple digit fees wouldn't surprise me at all), which I think very likely will result in a premature ending to the bull run. Also I bet the soft forks for taproot and shnorr and whatever other things result in less data being put into blocks are unlikely to be achieved before this bull run gets real hot and fees get much worse than ever. I think fees are going to get horribly bad in the next year and it is going to very much hurt bitcoin in the next 12-24 months, stalling its growth and probably short-circuiting the bull run. These tech updates and a robust and ready to go LN are very much needed, but they aren't coming soon enough. The quick fix is obviously a blocksize increase of a few hundred percent - I'm pretty sure a let's say 4x increase to blocksize would give bitcoin room to run in the bull run. That could be done so easily, if the community and the devs actually agreed to solve the immediate problem now, and then we could see how well these data reduction efforts and a readily usable LN work in the years to come afterward, possibly delaying the need for another blocksize increase for a long time.

Anyway thanks for that good point!

BTC will be spent like money everyday, its going to happen. Its not just going to be an investment that will just lie on the wallets, in the future when over billions of people will be using mobile wallets, we will be paying items to buy using our phones where soon big fees will be a hinder for us to spend btc. LN is a must.

I'm not saying the bull mania didn't inflate the fees, I'm just saying that the BCash split added tons of fuel to the already ongoing fire. The hashrate shifts caused the block times to slow down with 50%, which means that as per the average 10 minute block times, the blocks on average were only able to process 0.5MB worth of transactions instead of the usual 1MB. More blockspace scarcity on top of more blockspace scarcity = extreme ~$50 fees.

On top of that, most clients were (still are to some degree) bad in calculating proper fees. They are biased to recommend a much higher fee than needed.

It could be, it could not be. Higher fees = incentive to adopt Segwit so it might help adoption too in that regard.

I do not think that the increase in transaction fee in dollar value would affect or have the signicant effect to Bitcoin  Bull run.  You had witnessed it last 2017 it is not the transaction fee that stops it (bull run)  but  the launch of  CME where they sell Bitcoin infinitely since they are cash settled. 


more info about cash settlement here:

right, price is up, but volume is low. Price must maintain a 5,500-6,500 range for a few months just to be able to say the bear market is over, let alone say a new bull market has arrived



the taproot/merkle branches update will make all scripted transactions substantially smaller, I think that's very important also.


So today, Lightning open/close tx's are ~ 20% larger than a standard 1in 2out tx. Taproot hides the unused conditions (+ sig-agg collapses 2 signatures into 1) to make them both the same size, and that's just when comparing new segwit v1 LN open/close to standard tx using segwit v1. If we instead compared to a standard tx using segwit v0 or the original encoding format, a taproot LN open/close tx is actually a few bytes smaller.


taproot also hides the fact that a script was used at all, as only the spending script is revealed (even a standard transaction is, of course, a basic spending script). So all transactions look exactly the same on chain using taproot, the only differences will be the number of inputs, number of outputs and the amounts. Most of the information is hidden, there's no such thing as a P2SH taproot address, they're identical to P2PKH addresses from the perspective of someone analysing the blockchain.


tl;dr taproot is a gigantic privacy gain as a result of it being a massive scaling improvement. Lightning on-boarding is rendered cheaper and undetectable



right, the first exchange to do this will do fantastic business. Transaction spikes happening at the same time as price spikes is nothing new, been happening since the early days. Instead, traders can have their funds ready in a channel before the spike ever happens.

Combine that with the new option to remove the per channel limit (which exchanges would really need), and the whole "micro-payments only" argument goes out the window. I can imagine exchanges using lighting exclusively; time is money when it comes to trading, so if people can move their money to exchanges in seconds instead of minutes/hours (and for orders of magnitude reduction in fees), there's no way anyone will continue to do it on-chain. Why take that risk?



there was at least 1 reported, but it could've been hot air. doesn't matter, it'll only take 1 exchange to do it and suddenly they'll all need a piece of the action. They'll risk being irrelevant in the marketplace if not.

i think by "bullrun" he means the excited stage where there is a big in-flow of newcomers that results in a lot more on-chain transactions. and that period is mostly the final quarter of the total bullrun.

it will be a while before these new BIPs are implemented (version 1 SegWit). the biggest improvement (IMO) is Schnorr and signature aggregation (MuSig) which will reduce the size of transactions drastically (not just 72 to 64 but from 2x72+2*33 to 64+33 for 2of3 sig) and since many transactions are multi signature these days they all can fall in size. and that is not a "small help", that is huge.
but the problem is the same as SegWit (it is SegWit version 1 after all) and that is adoption. if people don't use them, they won't be as effective as they should be.

it doesn't have to only be "small" transactions. it mainly has to be more than a couple. which is basically what traders do. in fact LN can reduce the risk of using exchanges by a lot. imagine you could make a deposit every time you wanted to make a trade and cash it out as soon as you were done and that whole thing didn't cost you more than 10 satoshi and it only took a couple of seconds.
right now (as a trader) if you don't want to miss an opportunity you have to leave your coins on exchanges because depositing can take nearly an hour (6 confirmation), LN can remove that. in a volatile market an hour later price can be entirely different. keeping your coins in an LN wallet is not as safe as keeping them in your cold storage but it definitely safer than keeping them on an exchange.

i also haven't heard any exchange looking into LN.

I have the same concern, last time in 2017 the fee went crazy and really expensive, it caused so many people looking for alternative when want to do transaction, but seems like the developers will find a way to tackle this problem this time, and because the bull hasn't been so high I think we are still safe

I don't really care about the psychology of saying bitcoin is in a bull run. It just simply is. Doesn't matter if i say it is or isn't, doesn't change the fact that it is. Until bitcoin does something that says this gain is a trap and its heading back to $3000s, there is no reason to think it's not in a bull run. And I see no realistic possibility of that happening, so I simply state the obvious, that we're 5 weeks into the current bull run. I've been 100% sure its in a bull run since the night it broke through $4200 and spiked to $5000, because that was exactly the movement I was looking for to end the bottom of the market and start the bull run. It's obvious to me. I know some people like to wait months into the bull run before they confirm it in their minds. But for me its as obvious as the bottom was when bitcoin dropped under $4000 in November. The roughly 50% drop from $6000s to $3000s was an obvious sign that bitcoin had hit its final bottom, and I knew it was time to start accumulating immediately. And breaking through the resistance of the bottom April 1st and spiking to $5000, including the slow buildup to the resistance in the preceding weeks, looked exactly like what started the bull run in last 2015, so that was a super obvious sign that the bottom was over and bitcoin was in a bull market, and we've had 5+ weeks of confirmation of that since then. If it goes back to $3000s then I'm wrong, but there is zero reason or evidence to show that I'm wrong right now.

Update: And bitcoin just a few minutes ago broke through $6k for the first time since November. Yet another reminder we've been in a bull market since beginning of April

Anyway, a bit off topic.

I dont like obvious so much, I prefer the doubt that gives a better price to buy into.   Bull run talk introduces over expectation and momentum which can bounce off resistance encountered and bad news denting sentiment.
    Results in the price also selling off too quick as people are disappointed near term when the best price appreciation over long term anyway.


They are far too slow on this, I wonder if they do it on purpose for some reason maybe skim some margin off the fees they charge for multiple transactions sent