- The cost of sending Bitcoin usually goes up when the price of the cryptocurrency goes up.
- Although Bitcoin is fast approaching an all-time high, transaction fees are low – much lower than the 2017 price rally.
- Experts explained Decrypt What makes this time different.
The price of bitcoin is quickly approximating an all-time high – but the transaction fees, oddly enough, aren’t.
The cost of shipping Bitcoin had been notoriously high this year. This is partly due to the rise in the price of the cryptocurrency.
But the price of shipping the coin has gone down over the past month. According to Bitcoin, it now costs an average of $ 3.50 to complete a Bitcoin transaction BitInfoCharts data. On October 31, that number was $ 13.15 – 73% higher.
Why is this happening? Bitcoin transaction fees increase when more people want to use the network. And with so many People and companies are grabbing the cryptocurrencyThat certainly means more transactions and therefore more expensive fees, right?
Well, according to experts who spoke to them, not necessarily Decrypt. More and more people are buying cryptocurrency and pouring money into the crypto world – but that is not necessarily the case With it.
“It’s hard to be sure, of course, but one theory I have is that we are currently seeing a relatively small number (relatively speaking) of Bitcoin on exchanges,” said Torkel Rogstad, software developer at a crypto research company Arcanesaid. “It looks like at this point in the bull run people aren’t that interested in trading. Exchange traffic often leads to fee increases as people there want to get coins to trade. “
Suredbits, a company that aims to speed up bitcoin transactions, said Decrypt that “more people are not Send bitcoin. The company added that people who use scaling technologies like Segregated Witness (SegWit) are “easing the pressure on charges.”
During the peak of Bitcoin’s all-time high of $ 20,000 in late December 2017, transaction fees stood at $ 55. That was because people just went crazy about the coin and sent it around. There was more “mania,” experts said Decrypt.
This time, more people are buying up Bitcoin, but they’re not doing transactions: big tech companies like PayPal and MicroStrategy buy and hold the currency.
Simply put, Bitcoin is fair sitting in empty wallets.
“There was a greater degree of mania [in 2017]”Added Rogstad.” Mania isn’t quite there yet. “
Pedro Febrero, co-founder of the Crypto Nerds Academy and analyst at Quantum Economics, also said, “Even if the price goes up, it doesn’t necessarily mean an influx of users. It means more money is coming into the market. “
He added that “loads of Bitcoin” have been withdrawn from the exchanges, which in turn put additional price pressure on the price. “The less Bitcoin is available to buy, the more likely the price will go up,” he said.
So right now it looks like doing what Bitcoin was originally designed for – doing transactions – would be cheap.
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The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment or other advice.