It’s official: bitcoin is no longer “fast” and its transaction fees are no longer “low.”
We know this because Bitcoin.org, the internet presence for the cryptocurrency started by its founder(s), stripped these words from its description page. These changes were tracked on GitHub and a sharp-eyed Hacker News user made them more public today. These edits unfortunately make the description more accurate.
Data from BitInfoCharts.com tells the story of rising transaction fees. The average fee broke $1 in March 2017 to later shoot above $8 that August. Things snowballed during that holiday season—fees peaked at $55.16 on December 22. At the time of this writing, they’re holding around $19.10.
“High” and “low” are relative terms, but with the majority of bitcoin’s nine-year history boasting fees well below $1, it’s clear that the times they are a-changin’. Or the answer is blowin’ in the wind. Or something like that.
Simultaneously, the bitcoin network is taking an increased amount of time to process and finalize transactions, leaving cryptocurrency devotees groaning. Such network slowdowns have been attributed to malicious hacker attacks in the past, but there are two unsettling theories brewing in the hivemind: the bitcoin network is slowing down because people are using it the way it’s supposed to be used, or these inconveniences stem from the major uptick in bitcoin trading activity of late.
Bitcoin transactions—whether purchases of goods or trades in a market—are verified by the network’s users before being finalized in the blockchain. Batches of transactions are encoded as “blocks” that must be smaller than one megabyte, per restrictions baked into how bitcoin works. Blocks are reaching this capacity quicker than they ever have before, and the end result is that it bitcoin loses the speedy, magical convenience its users loved to boast about. What used to take 10 minutes now takes much longer.
On January 21, 2018, the average confirmation time was 5.5 days. It takes the Federal Reserve bank a fraction of that time to clear a check. As we’ve previously written, the future of keeping bitcoin alive may lie with managing these budding drawbacks, a job for the protocol’s core developers.
For the alternative cryptocurrencies with virtues of speed and affordable use, now is the time to extol them.