[2020-10-30] Bitcoin transaction fees jump by 570% over 12 days

[Best_Change]

Average transaction fees on the bitcoin blockchain have increased by 573% over the past 12 days. According to BitInfoCharts, today the figure is $12.50, which is the highest value since January 2018.

At the same time, the queue of unconfirmed transactions has increased by 1800%. This happened amid an increase in the price of bitcoin from $11,200 to $13,800 and a drop in the network hash rate.

The latter is due to the end of the rainy season in the Chinese province of Sichuan, where about 10% of the total computing power of bitcoin is concentrated. Local miners are using cheap hydroelectric power, which has now risen in price, so farms are being moved to regions with more affordable tariffs.

Source: https://www.coindesk.com/bitcoin-transaction-fees-hashrate

Read more news in our Medium channel: https://medium.com/@BestChange

[NotATether]

I don’t like how a large slice of the mining power is based in a single province. It makes it much more easier for an environmental disaster there to slow down transactions.

Then again, we don’t have many other places in the world that have favorable conditions for mining farms, so I guess mining power should be distributed across the different countries that are cold/rainy enough to mine a lot there. (I heard rumors that cold weather makes mining faster because he miners can be overclocked). I guess Antarctica is always an option in the distant future  

[error08]

and bitcoin not yet surpass $14K, imagine if the rally could reach over $15K, how much fees do we have to pay then?
Currently, total mempool transactions are 62,993 (continue to increase every second) and the fastest fee is 344 satoshis/byte.
It reminds me of unconfirmed transactions over 155,000 in May 2017 with fees over BTC85 waiting to be confirmed, are we heading to the same path again?
Makes me wonder about segwit and LN.

[bryant.coleman]

I wanted to send some coins to one of my friends. When I checked Blockchain.com, it was asking for $12 in fee. I cancelled the transaction, as I thought that sending $25 after paying $12 in fee is not that worthwhile. So I called him, and with his permission sent the payment with my bank account. I feel disappointed about it, as I don't use my bank account that regularly. But here, I was having no other choice.

[bbc.reporter]

Coindesk is only creating a storyboard that the high fees were caused by the fall in hashrate. Look how the article was written. I shake my head.

@Best_Change. What were the majority of transactions that caused fees to increase? Whale wallets to exchange, exchange to whale wallets and exchange to exchange transfers, I reckon.

[hv_]

Wtf

 

[reliable]

I wanted to send some coins to one of my friends. When I checked Blockchain.com, it was asking for $12 in fee. I cancelled the transaction, as I thought that sending $25 after paying $12 in fee is not that worthwhile. So I called him, and with his permission sent the payment with my bank account. I feel disappointed about it, as I don't use my bank account that regularly. But here, I was having no other choice.

It is insane now and blowing up too much will hamper a lot of users unable to transfer because at times it is not worth spending as amount will be smaller. Instead converting to some other coin and then sending if necessary, make sense as it would not be like bitcoin transaction fees of those other coins.

[TalkStar]

Then again, we don’t have many other places in the world that have favorable conditions for mining farms, so I guess mining power should be distributed across the different countries that are cold/rainy enough to mine a lot there. (I heard rumors that cold weather makes mining faster because he miners can be overclocked). I guess Antarctica is always an option in the distant future  

As far as i know cold weather is favorable for mining equipment's and this is why most mining farms try to ensure their mining machines longevity first. Mining machines temperature control is a big fact but it doesn't mean to fulfill that you have to choose destination like Antarctica. Currently most mining farms are doing good with their central cooling system and its not an big task for professional miners.

You can take a look here and see how miners are running Liquid cooled bitcoin mining farm.   

[Harlot]

So what's the reason why these mining farms temporarily shutdown their operations? Is the article accurate on saying that its because they want to move to another location in order to cut electrical expense? Or are they just guessing? But really the drop in hashrate and at the same time the price of increase in Bitcoin will just make the transaction fees high since a lot of people will be actively moving their Bitcoin in order to take advantage of the  high price and they will be bumping up their fees so they can be prioritized for it. Maybe this is also one of the techniques of the mining farms to get higher pay in times like this one?

[bryant.coleman]

It is insane now and blowing up too much will hamper a lot of users unable to transfer because at times it is not worth spending as amount will be smaller. Instead converting to some other coin and then sending if necessary, make sense as it would not be like bitcoin transaction fees of those other coins

The miners have blocked any attempt to raise the block size, giving the silliest of the excuses. I have been associated with cryptocurrencies for more than 8 years now, and I saw the damage caused as a result of the sky-high transaction fees in December 2017 before my own eyes. Back then, users were paying up to $50 as fee for a single transaction. 

[sanjusajan]

Its very bad news to hear that bitcoin increase the transaction fees because the small users will lose their profit so that they will not use it again .and how often the small users earn small amount of bitcoin and they loss their profit amount by paying high amount of fees .

[DapanasFruit]

I don’t like how a large slice of the mining power is based in a single province. It makes it much easier for an environmental disaster there to slow down transactions. Then again, we don’t have many other places in the world that have favorable conditions for mining farms, so I guess mining power should be distributed across the different countries that are cold/rainy enough to mine a lot there. (I heard rumors that cold weather makes mining faster because the miners can be overclocked). I guess Antarctica is always an option in the distant future  

I agree. When a certain area is getting a big percentage of the Bitcoin mining pie this can be a potential problem later for any reason -- climactic, political or economic. The reality here is that Bitcoin miners are usually operating in locations which can cost less in doing the business so profit is the main drive more than anything. This is the big reason why here in my country Bitcoin mining is not making any inroads because power cost here is not so cheap compared to other countries in the region. Yes, hopefully, we can do mining based in Antarctica, but I am not so sure of the source of power in there, maybe ocean currents or fossil? Going back to the main topic, this is quite so expected every time Bitcoin is making a big rise. It happened in the past where the transaction fees became astronomical high and of course it can still happen in the future as the more transactions are clogging the network the more there is an intense competition. This is a big reality all of us here in Bitcoin got to experience.

[bryant.coleman]

Now we are having another issue. The Mempool size is down to minimal levels (0-2 MB). But users continue to pay large amounts as transaction fee. When I checked earn.com, it was showing median transaction fee at 300 Sat/Byte. But the same website was showing that it is possible for transactions with a fee as low as 2 Sat/Byte to get confirmation within 1 hour. I think, first we need to educate the users on how to set the transaction fee.

[TalkStar]

Now we are having another issue. The Mempool size is down to minimal levels (0-2 MB). But users continue to pay large amounts as transaction fee. When I checked earn.com, it was showing median transaction fee at 300 Sat/Byte. But the same website was showing that it is possible for transactions with a fee as low as 2 Sat/Byte to get confirmation within 1 hour.

After experiencing recent higher transaction fees some new bitcoin users thought it will remain same in the upcoming days and its true that it created hesitation on their mind. Its not like that only you and me are facing this transaction fee related issue but also who are using bitcoin for last 4/5 years are passing same situation. As far as i know due to higher transaction fees many transaction were unconfirmed and its because people were putting the same fee that they used in the past. It needs time when suddenly fees get lower but users are paying high fees for faster transaction.    

I think, first we need to educate the users on how to set the transaction fee.

I don't think so. Bitcoin users will gradually start to make transaction by following proper transaction fee and when its a matter of money then no one need to notify about realtime fee structure.

Recent news about Bitcoin hashrate, Bitcoin Hashrate Rebounds as Asian Miners Bring Machines Back Online    

[error08]

Now we are having another issue. The Mempool size is down to minimal levels (0-2 MB). But users continue to pay large amounts as transaction fee. When I checked earn.com, it was showing median transaction fee at 300 Sat/Byte. But the same website was showing that it is possible for transactions with a fee as low as 2 Sat/Byte to get confirmation within 1 hour. I think, first we need to educate the users on how to set the transaction fee.

I don't check that site as a reference anymore, not reliable information in my opinion as they show 300 sat/byte while other sites provide better information regarding unconfirmed transactions on mempool, how much fees we have to pay, and how long it takes to be confirmed.
check these 3 sites ;
https://bitcoinfees.net/
https://mempool.space/
https://jochen-hoenicke.de/queue/#0,8h

after check 2 sites on top, you'll know that there are over 15k unconfirmed transactions right now and 8 sat/byte should be sufficient which will be confirmed within 30 minutes.

[bryant.coleman]

I don't check that site as a reference anymore, not reliable information in my opinion as they show 300 sat/byte while other sites provide better information regarding unconfirmed transactions on mempool, how much fees we have to pay, and how long it takes to be confirmed.
check these 3 sites ;
https://bitcoinfees.net/
https://mempool.space/
https://jochen-hoenicke.de/queue/#0,8h

after check 2 sites on top, you'll know that there are over 15k unconfirmed transactions right now and 8 sat/byte should be sufficient which will be confirmed within 30 minutes.

Yes.. these sites looks like they provide more accurate statistics. BTW, I won't blame sites such as earn.com, which shows a higher median transaction fee. Their algorithm is designed to work like this. And they are accurate when they show 300 or 320 Sat/Byte as the median fee (because most of the users are paying this much fee). My suggestion is that they should add another column, to show how much fee is actually required, in addition to the median fee.

[error08]

Yes.. these sites looks like they provide more accurate statistics. BTW, I won't blame sites such as earn.com, which shows a higher median transaction fee. Their algorithm is designed to work like this. And they are accurate when they show 300 or 320 Sat/Byte as the median fee (because most of the users are paying this much fee). My suggestion is that they should add another column, to show how much fee is actually required, in addition to the median fee.

I don't really understand what kind of API they implement, but it will misleading newbies and layman to pay higher fees than required.

The fastest and cheapest transaction fee is currently 300 satoshis/byte, shown in green at the top.
For the median transaction size of 223 bytes, this results in a fee of 66,900 satoshis.

Even at current mempool conditions; less than 8k unconfirmed transactions, it still suggests paying more than necessary.
While https://bitcoinfees.net/ suggests paying 9 sats/byte is enough for less than 20 minutes to be confirmed.
Yesterday, I paid 1 sats/byte and the transaction confirmed within 16 minutes, really depend on how many unconfirmed transactions on the mempool.

[Vishnu.Reang]

The only advice I can give to new users is not to exclusively rely on one website to set the transaction fee. If you are using the Blockchain.com wallet, then don't use the default fee that comes up while sending the coins. Go to the custom fee option, and set a fee yourself after checking the Mempool size and the number of transactions that are waiting to be confirmed.