Bitcoin is 'capped' at 20k maximum now, because of high Fees (till when?)

[cellard]

I have not seen enough evidence to conclude that Bitcoin's all time high was capped by the capacity of the network reaching a threshold of high fees, high enough that it stopped further buyers from entering the market. It most likely had an impact on those wanting to buy small amounts, but serious investors woudln't care about 50 bucks.

Nonetheless, it most likely got to that point due:

1) Exchanges being a mess (no tx batching)
2) Segwit wasn't operative
3) LN wasn't operative
4) Ver, Jihad and co were spamming the network

Next time things will be different. Capacity has been increased, tx batching is in, and bad actors mentioned above are now broke due bagholding massive Bcash bags.

[el kaka22]

I think segwit and LN is not operative. They are just not massively adopted. Exchanges still charge you a lot of money to withdraw your coins but in reality it costs them so much less and they make a profit of that difference. It is not like your small 0.001 profit would mean too much to you but 0.001 profit from each customer for binance means the world for them considering how many times people withdraw in a day.

If you assume at least 1000 people withdraw that's 1 bitcoin if nothing thats still a good amount for daily profit making 30 bitcoins a month 365 bitcoins a year and I assume the number is WAY more than just 1000 people withdrawing. Hence, we are capped at 20k is a liable assumption but high fees are not because of blockchain not carrying enough, its others that take advantage of once upon a time problem.

As soon as one exchange say withdraws will be tiny, others will have to follow in order to not lose market share.

[exstasie]

I think segwit and LN is not operative. They are just not massively adopted. Exchanges still charge you a lot of money to withdraw your coins but in reality it costs them so much less and they make a profit of that difference. It is not like your small 0.001 profit would mean too much to you but 0.001 profit from each customer for binance means the world for them considering how many times people withdraw in a day.

That's not all profit. Exchanges have to deal with huge numbers of outputs from customer deposits. Whether you send a thousand 0.001 BTC deposits or one 1 BTC deposit, Binance credits the same amount to your balance, but the costs to make customer withdrawals are way different in these two scenarios. Their customer withdrawal transactions are way larger and more expensive than anything we have to deal with. They might make some marginal profit, but it's less than you think.

[1Referee]

It most likely had an impact on those wanting to buy small amounts, but serious investors woudln't care about 50 bucks.

Definitely. I recall having seen a video where Roger Ver and another dude explained how bad the situation was at that point. The point basically was that the dude who sent a transaction worth millions has seen the value of that transaction tank hard because the fee was too low and the transaction was stuck for a long time.

It's so ridiculous that it isn't even something you can take serious. If you send a transaction of that magnitute you will even include a fee of $1000 to make sure the transaction goes through with the first block. One can better 'lose' $1000 in fees than nearly a million in value. Another thing is that the dude could have double spent that transaction. High fees are obviously not something to cheer for, but it similarly isn't the end of the world.

People don't understand that BCash taking over half of Bitcoin's hashrate made the block times stretch all the way to 15-17 minutes instead of the 10 it usually hovers around. They also severely spammed the network to advertise their "cheap" chain. Take away the hashrate movements and the spam attacks, I dare to say that the fees would peak out at $10-$15 due to the price being insanely high.

[exstasie]

It most likely had an impact on those wanting to buy small amounts, but serious investors woudln't care about 50 bucks.

Definitely. I recall having seen a video where Roger Ver and another dude explained how bad the situation was at that point. The point basically was that the dude who sent a transaction worth millions has seen the value of that transaction tank hard because the fee was too low and the transaction was stuck for a long time.

It's so ridiculous that it isn't even something you can take serious. If you send a transaction of that magnitute you will even include a fee of $1000 to make sure the transaction goes through with the first block. One can better 'lose' $1000 in fees than nearly a million in value. Another thing is that the dude could have double spent that transaction. High fees are obviously not something to cheer for, but it similarly isn't the end of the world.

Replace-by-fee is an easy solution. Ver and Bitpay continue to criticize it, but it's an elegant and fast way to push stuck transactions. Between good fee estimation and RBF, there's no reason anyone should be waiting many hours or days for a high-value transaction.

[cellard]

I think segwit and LN is not operative. They are just not massively adopted. Exchanges still charge you a lot of money to withdraw your coins but in reality it costs them so much less and they make a profit of that difference. It is not like your small 0.001 profit would mean too much to you but 0.001 profit from each customer for binance means the world for them considering how many times people withdraw in a day.

If you assume at least 1000 people withdraw that's 1 bitcoin if nothing thats still a good amount for daily profit making 30 bitcoins a month 365 bitcoins a year and I assume the number is WAY more than just 1000 people withdrawing. Hence, we are capped at 20k is a liable assumption but high fees are not because of blockchain not carrying enough, its others that take advantage of once upon a time problem.

As soon as one exchange say withdraws will be tiny, others will have to follow in order to not lose market share.

But this has nothing to do with Bitcoin's network or in other words it's technology per se, that is just part of the competing exchanges which are free to put whatever fee they think reasonable to find profit and remain competitive.

If you don't like the fees of a certain exchange, use another one, and if you think you can do better then create your own... what can I tell you? I don't really use exchanges at all except in rare occasions, so im not sure how it looks like nowadays, but on-chain fees definitely have gone down. Capacity has been objectively increased because of reasons I mentioned.

[okala]

Hi  there!

So if Bitcoin would go to 20k in eg december 2018 -
then fees would go cracy high like 50usd again, wouldn't it?
Is that right?

I mean, what do we have, a few more % adoption of segwit, which does.. not do anything much, does it?
Anything we have now that we don't had in last december 2017?

So basically bitcoin is capped at eg 15k (when did fee's become cracy?) - until lightning is mass adopted?
What is a guess of timeframe for lightning mass adoption - 3 years?

I think the issues of high fees has been deal with sometimes ago and we are surpose to have low fees even if bitcoin went as high as $100,000. I think by now fees is no longer the problem because bitcoin was made to provide low fees.

[darewaller]

I think the issues of high fees has been deal with sometimes ago and we are surpose to have low fees even if bitcoin went as high as $100,000. I think by now fees is no longer the problem because bitcoin was made to provide low fees.

Ye,s the problem of scalability have been resolved once we got segwit activated and right now the total number of pending bitcoin transactions to be picked by next block in memory pool is less than 1600 transactions and optimal fee per Kb is 1170 satoshi which is ~4 US cent as per current BTC value. Do we still need to consider that tx fees is stopping bitcoin's rising markets ?

How do we assume that the ATH of $20k was set by tx fees ? I understand OP like due to high fees, there were no new investors and due to lack of new investors bitcoin was struggling to get beyond $20k. But, since 2018 beginning I was not seeing high tx fees, still bitcoin was falling down by failing to attract new investors.

Tx fees was a reason why bitcoin's value was not rising. But, now we got many other problems like whales manipulations and due to those reasons now we are trading below $4k and honestly not thinking about $20k as of now, just $10k also will make me a happier bitcoin investor.