While some transactions are delayed, preferential treatments have been given to transactions where fees are applicable, thereby chipping into one of the acclaimed advantages of peer-to-peer transactions which is the absence of charges.
Somewhat of a paradox with bitcoin’s use cases is that as demand grows, certain aspects of it perform worse and worse; something that can happen even when the price rising. An apparent price rally lead bitcoin prices above previous all time highs, for it to keep trading above $2000 levels. Many vital parts of the bitcoin economy benefit greatly from this increase in bitcoin’s price.
To name a few, pools are seeing an automatic increase in their earnings as the commissions they stably get from miners increases in value along with the price, mining becomes more profitable, exchanges experience greater trading volumes as speculation becomes more rampant and services receiving fees in bitcoin see their revenues also rise.
Bitcoin’s price from mid April up to today.
The bullish spiral cryptocurrency economies can enter with a price increase is unfolding right in front of our eyes. With bitcoin’s price increase essentially kickstarting a market-wise bullish overturn, cryptocurrency traders managed to make the markets of several other cryptos explode along with bitcoin’s.
It’s evident that bitcoin has proven itself to be great as a speculative tool, and hence a valuable commodity for risk takers and traders after great returns. Many people have dubbed bitcoin as the best performing currency and recent events can only serve as proof that bitcoin is indeed achieving great performance in terms of returns. But really, how comparable can bitcoin be to currency at its current state?
In reality, bitcoin’s success as a commodity is (at least to some extent) incompatible with its success as a currency. In order better understand the reason behind this paradox, one would need to look in the metrics that make something a successful currency or commodity. For commodities, success is measured in its returns against the rate of return of a relatively low
Bitcoin users recently lodged a series of complaints against the transaction speed offered by the platform. There are plenty of protracted delays, which create a negative impact on the scalability of the cryptocurrency. Some transactions are delayed. In the meantime, preferential treatments have been provided to transactions with higher fees. Michael Vogel, Chief Executive Officer of Netcoins, thinks it is possible to send Bitcoin transactions without being subjected to any fee. Most wallets give you the ability to customize the fee. Therefore, you are abled to set zero fees, where a transaction is being held for several days without receiving a confirmation.
The transaction fees of Bitcoin have made a lot of news throughout the past. It is one of the most discussed topics in the Bitcoin community. Some critics condemn all forms of charges that they will have to pay. However, there are some people in the community, who pay more attention towards the charge rates, apart from anything else. Before we go ahead and determine whether a transaction fee should be there for Bitcoin, it is important to get a clear understanding of Bitcoin transaction fees. Is it really important to obtain a fee from people who are engaged in Bitcoin transactions? Or is there any possibility to omit these? This is a topic that needs to be discussed in detail to come up with a reliable answer.
Achieving the perfect balance
Michael Vogel explained the transaction fees when somebody is making a payment with the cryptocurrency. According to it, the main reason why a transaction fee exists is to provide incentives to the miners to confirm the transaction. Moreover, Michael Vogel highlighted that miners will not be tempted to go ahead and spend their time and effort confirming a transaction, if they don’t get anything out