With a clogged network, users will start abandoning BTC for alts. Change my mind

[20kevin20]

I've been around the space for many years but I do not remember seeing the Bitcoin mempool this clogged ever before. It's becoming exhausting even for me to keep paying high fees. For example, due to the necessary fast confirmation, only in the past two months I have spent more than $200 in fees for a handful of txs.

Therefore, what I had to do is.. I had to find a way to use cryptocurrencies while allowing me to pay a cheaper price for my payments. In other words, I still have my BTC but they're kinda useless besides moving money without caring whether they're going to be confirmed today or within a month.

I've moved to alts, at least until the mempool unclogs. This is something I've never had to do before. The main issue I see is.. my partners have started asking me for altcoin addresses as well. They're moving off BTC too. The storage size requirement for full nodes is quite high for the average person to afford running one.

With large billion-dollar companies investing in BTC and trying to turn it into a mainstream adoption, the network is only bound to continue clogging up. If that isn't enough, remember that billion-dollar companies can afford even exceedingly-high fees for their transactions. This means that the more companies join in, the less average Joes will afford to compete with them in fees since my $10/tx in fees is nothing for a Tesla-like brand. Putting it another way, this means the billionaires will continue to be able to use the network while your transactions might not get confirmed even within a week.

I'm in this situation right now. I have over 10 payments that I've sent with a previously decent fee (6-8sat/vbyte) that haven't been confirmed although it's been about two weeks ever since they've been broadcasted.

I'm still a Bitcoin fan - don't get me wrong. In fact, I'd absolutely love to be able to continue with BTC. But between having to pay under $0.1 and $15/tx (with only 1-2 inputs!) in fees, I'd obviously choose the former. Hence, especially since I do not consider myself to be living under poor (or under average) financial conditions, I really think people will be soon starting to steer away from BTC in favor of altcoins. The bad news if this happens? Even shitcoins might get more attention..

The even worse news: unless we change this, the network might make a lot of free space for corporations while we might have to move away. What we've once wanted to do, decentralizing the economy, will only be a possibility for the rich.

Therefore, as the title says.. with a clogged network, current (or future) Bitcoin users will start leaving Bitcoin for alts. Change my mind.

[Charles-Tim]

Lightning network is available, but not knowing why people are not just adopting it, this is one of the best solution for fast transaction and cheapest fee. The use of segwit addresses is is also very important, it can reduce the fee by 42% for native segwit and by more than 30% for nested segwit.

The issue of scalability has been the reason bitcoin cash forked, because many of the bitcoin community did not see bitcoin as only money but also as an asset. But, if bitcoin segwit scaling solution is possible, and also the upcoming taproot, it means there will still be more proposals in order to solve bitcoin scaling issues.

[20kevin20]

Lightning network is available, but not knowing why people are not just adopting it, this is one of the best solution for fast transaction and cheapest fee.

Not when the average guy using BTC doesn't even know how LN works and so few people/companies are accepting it.. The main problem is currently sitting on the main layer - second-layer solutions aren't imo real solutions to those issues.

[logfiles]

Let's talk about the second biggest cryptocurrency, Ethereum, which was created as an alternative which much lower fees to Bitcoin but look what happened. It's even more messed up than what they used to say about Bitcoin. People spent ridiculously huge amount in single transactions.

Of course fee spikes happen, but transaction fees will reset with time. It isn't going to be permeant. I have personally never spent more than $2.5 per transaction in the past months and my transactions are usually confirmed in the next few blocks. The secret is in timing when to send out your transactions, number of inputs and what type of addresses you use. Just last Sunday the transactions fee rate came down to around 6-7 sats/vbyte. Doesn't seem to be very bad to me in a bull run, does it?

[Charles-Tim]

Not when the average guy using BTC doesn't even know how LN works and so few people/companies are accepting it.. The main problem is currently sitting on the main layer - second-layer solutions aren't imo real solutions to those issues.

You are right. If most wallets today are supporting lightning network, and also if exchanges are supporting it (but exchanges may not because of the interest they are generating from bitcoin on-chain transactions), more people will use it. It is one of the best solution, but the world (wallets and exchanges most especially) are not adopting it.

About the on-chain scalability, it will be a gradual process in a way certain creteria will be put into place not to result into hardfork, just as Segwit was proposed and also the ongoing Taproot proposal with almost all bitcoin community agreeing.

[Poker Player]

That's just people exchanging gold for cash to buy groceries.

If you want fast cheap transactions for everyday payments, you'll exchange bitcoin for alts. If you want to store value you'll buy/keep Bitcoin. I know this is not the p2p e-cash system original idea but Bitcoin is being successful as store of value and, according to Gresam's law, even if a solution like LN was really successful, people would still keep bitcoin and would use another less valuable alternative to spend.

[AGD]

As soon as many people abandon Bitcoin there will be less tx and the miner fee goes down.

[Mpamaegbu]

OP, you aren't alone on this. Apart from the transaction fees being a killer, the delay in confirmation time makes it worse. The fees when withdrawing from an exchange to a private wallet is a slit throat experience in addition to the already exacerbated situation. Perhaps, that could also be a reason Dogecoin is gaining momentum as transaction fee is almost like paying nothing. This day, I transact in USDT (ERC). It's very fast and the transaction fee is way too good. May be with time this exodus away from Bitcoin will become noticeable and by then it may have become too late for Bitcoin and the community that so much cherishes it.

The use of segwit addresses is is also very important, it can reduce the fee by 42% for native segwit and by more than 30% for nested segwit.

I don't know if this is just with me as the Blockchain app I use doesn't recognize Segwit addresses (It has never recognized it once since the Segwit thing came to be). It records them as invalid addresses. Does anyone have similar issue?

[pixie85]

For me Bitcoin fees aren't that big if you use it for investment purposes.

When Bitcoin was cheap, like 1000 USD, you had to pay 0.5% of its value in transfer fees. Has that changed at all? If it did it's for the better not for worse because it used to be that to send 1000 you had to pay $5 in fees. Now to send 10 thousand in Bitcoin you are paying much less than $50 in fees, so I see no problem as long as the fees are lower than 1%.

Why are bitcoin fees a problem to you? Most financial institutions like fiat currency exchanges also deduct about 0.5% -1% fee for any operation like international transfer and such.

As soon as many people abandon Bitcoin there will be less tx and the miner fee goes down.

And people like OP will return because then it will be cheap for them... for a few weeks at least

[Charles-Tim]

I don't know if this is just with me as the Blockchain app I use doesn't recognize Segwit addresses (It has never recognized it once since the Segwit thing came to be). It records them as invalid addresses. Does anyone have similar issue?

I have never used blockchain wallet before, but I just downloaded it not quite long for testing, it does not support both native and nested segwit addresses, it is one of the wallets misleading people to pay high unnecessary fee. Although, it is one of the wallet not recommendable for use, also a web wallet which are most vulnerable to online attacks. For it not supporting segwit is also one of the good reasons this wallet should not be used.

[20kevin20]

As soon as many people abandon Bitcoin there will be less tx and the miner fee goes down.

Is that a good way Bitcoin could end up though? If Bitcoin cannot scale to sustain this much load and ends up with a huge exodus of users because of it, then it'll fail as the currency/asset we currently want it to be. Remember that the number of people using BTC around the world is still very, very low. Over the years, if the number grows, then it'll just be today's issue but only worse.

Why are bitcoin fees a problem to you? Most financial institutions like fiat currency exchanges also deduct about 0.5% -1% fee for any operation like international transfer and such.

I've been around the times when BTC was $1k and I remember I had to pay around $5 for a $1k transfer. I might be wrong though, as it's a quite old memory (edit: and I wasn't using coin control at the time). As mentioned in the OP, I had to recently pay a quite large amount of money for a few transfers. This isn't something sustainable over the long-term (it barely was over the short one!).

A few days ago I wanted to use Bisq. It required me to pay $30 in fees for two transactions. That's just mining fees. The problem is with smaller inputs - the fees remain the same, but having to pay $10 for a $100 payment is definitely not something I can afford.

Even for investment purposes, it's still a bad situation imo. I've moved a few larger UTXOs with sub-5sat/vbyte fees and they're still unconfirmed although it's been quite a while. Weeks actually. Some of my money is still unconfirmed since early February with 1sat/byte fees. I have a disposable wallet from which I've moved some money back in January with 1sat/byte fees. I am still waiting for it to be confirmed so that I can throw away the seed since I expect the tx to possibly drop from the mempool at some point.

As I said, if this trend continues then larger wallets will be able to prioritize their transactions over everyone else's. This becomes a significant issue once citizens of third-world countries (or average Joes from the EU with smaller salaries) want to decentralize their economies. If the rich are still the ones prioritized and you can't pay or move your bucks, then I think at least one component of what BTC was supposed to be is failing. Imagine what Bitcoin's network would look like if PayPal suddenly had all their txs on-chain.

For reference, in Romania most of the people I know are earning $500-800. Even for $800 a month, having to pay 1.25% of your salary per each tx is imo a burden. But now there's one more issue: my coins are usually moved with coin control so I almost always move coins with just 1 single input or 2 at most. I guess the fees would've been way higher if I had to pay for multiple inputs as the tx size grows, right?..

And people like OP will return because then it will be cheap for them... for a few weeks at least

And of what use is it if this is a continuous cycle? High fees, increasing number of BTC users => exodus of users, lowering fees => higher fees (..)

You probably afford more than the average person does, so you don't see the issue. I might afford to pay $200 for a handful of txs, but for others that is half a salary (or for countries like India, a few months worth of salary).

[doctor877]

this is one of the sad issues especially for people who need to move low amount of bitcoin. people will definitely find alternatives, what just needs to be done is how to keep a hold on bitcoin for whoever wants to and am sure everyone might still need to encounter bitcoin in one way or the other. maybe because LN isnt sitting on the main chain is why the adoption is difficult, it seemed to be the only possible solution to this high fees and confirmation. timing is very important also in sending transactions and the type of address you use.

[pawanjain]

Let's talk about the second biggest cryptocurrency, Ethereum, which was created as an alternative which much lower fees to Bitcoin but look what happened. It's even more messed up than what they used to say about Bitcoin. People spent ridiculously huge amount in single transactions.

Of course fee spikes happen, but transaction fees will reset with time. It isn't going to be permeant. I have personally never spent more than $2.5 per transaction in the past months and my transactions are usually confirmed in the next few blocks. The secret is in timing when to send out your transactions, number of inputs and what type of addresses you use. Just last Sunday the transactions fee rate came down to around 6-7 sats/vbyte. Doesn't seem to be very bad to me in a bull run, does it?

You are right that fee spikes happen but this can't keep on happening right ? There's need to be a solution to this.
We can't keep on waiting for the right time and we would definitely have to make some urgent transactions in case of emergencies.
If such spikes happen frequently then I'm afraid people will jump from bitcoin to alternate cryptocurrencies.

[Altcoinsintel]

Ok, I will just reply to the title, as this is what caught my attention.
BTC won't be abandoned by anyone. The reason is it isn't used by anyone. 99.99% of investors are using exchanges, Paypal  or custodial services like Grayscale.
Nobody holds a private key. Just the early investors, the trezor owners from 2013 and a few more that are aware of the actual potential of cryptocurrencies.

The rest are just there for their Bitcoin investment as this is what they've been told. Nobody uses Bitcoin for purchases. It is just a very small number that is insignificant. Otherwise we would be flooded with news about how much Bitcoin is used around the world.

Even in bitcointalk, I rarely read any post about someone actually using Bitcoin as a currency, which was the primary target it had. It is used for hodl and nothing else, this makes it losing value as it also losses the currency feature.

[sheenshane]

I don't know if this is just with me as the Blockchain app I use doesn't recognize Segwit addresses (It has never recognized it once since the Segwit thing came to be). It records them as invalid addresses. Does anyone have similar issue?

I have never used blockchain wallet before, but I just downloaded it not quite long for testing, it does not support both native and nested segwit addresses, it is one of the wallets misleading people to pay high unnecessary fee. Although, it is one of the wallet not recommendable for use, also a web wallet which are most vulnerable to online attacks. For it not supporting segwit is also one of the good reasons this wallet should not be used.

AFAIK, you can modify fees on Blockchain.com wallet aside from regular and priority fees option which definitely higher and fixed fees and yes, they aren't supported both native and nested Segwit addresses.  I tend to agree that this web wallet isn't recommendable, there are tons of issues and most commonly poor customer support.

In OP's concern and most of us concerned, the terrible fee of Bitcoin upon having transaction.  
I noticed that the Bitcoin transaction fee will increase when there's a bull trend in the market, but when there's a correction, Bitcoin fees will drop.  Not all the time Bitcoin transactions always high, for example, like weekends.  I noticed that it will drop the required amount of fee from mempool when it isn't clogged.  Therefore, there's perfect timing upon making transactions and always check the mempool for the required amount fees before having a transaction.

Probably that's the reason now Bitcoin was treated as a store of a valuable asset, not a daily transaction, just because of the fee, they prefer to hold than spending for every day what so ever the purpose.  But I don't see people switching into altcoins, in fact, Ethereum and Bitcoin had the same situation of having ridiculous fees.  There's nothing we can do as of now about this high fee, in fact, that is the same amount of fraction in satoshi per transaction but the value was increased because the price goes up.

For alternatively avoiding the possible high cost of the fee, encourage everyone to support Bitcoin wallet that supports Lightning Network and use Segwit wallet address, you can at least modefy the fee but not the trasnaction speed.  Just accept that how Bitcoin works.

[Yogee]

The main issue I see is.. my partners have started asking me for altcoin addresses as well.

Are you talking about business partners that you deal with often? I voted no in the poll but I won't criticize you for moving into other cryptocurrencies for faster and cheaper settlements. I wouldn't want to incur more expenses for business transactions either.

Let's talk about the second biggest cryptocurrency, Ethereum, which was created as an alternative which much lower fees to Bitcoin but look what happened. It's even more messed up than what they used to say about Bitcoin. People spent ridiculously huge amount in single transactions.

We can also talk about how retail traders that used to love Ethereum are moving into BSC. This is just proves what 20kevin20 is saying. It doesn't matter what coin is it. Users will leave if they find it inconvenient to use.

[AGD]

As soon as many people abandon Bitcoin there will be less tx and the miner fee goes down.

Is that a good way Bitcoin could end up though? If Bitcoin cannot scale to sustain this much load and ends up with a huge exodus of users because of it, then it'll fail as the currency/asset we currently want it to be. Remember that the number of people using BTC around the world is still very, very low. Over the years, if the number grows, then it'll just be today's issue but only worse.

...

Everybody can choose the fee he wants to pay and miners can choose the fee they want to earn with a tx. So when you don't like high fees, than don't pay it. If nobody pays high fees, than the miner will accept more tx with a low fee.

[KonstantinosM]

I'm sure bitcoin will fix the transaction fee issue even if it takes a long time. I'm not going to abandon it.

However, if you allow me to shill my bags syscoin would work great for point of sale transactions until the lightning network adoption happens.

Syscoin can do 60-300k TPS and the fees right now (really empty network) are under 1 cent. Of course syscoin is so underutilized that there is practically 0 adoption but the technology is all there.
The cheapest way to move value right now is that network, and because it scales well, the fees would probably stay even with much greater adoption. It's fast and it's dirt cheap.
Syscoin is merge mined with bitcoin for Proof Of Work, and has Masternodes for most of the mining reward, voting and providing an avenue for even faster transactions and better scalability.

As for convincing you not to abandon it. Bitcoin has the first mover advantage and can afford to move slowly in a much more mature way.  Proof of work is the only proven battle tested paradigm and bitcoin has the largest network. Syscoin is anchored to that same proof of work through merge-mining.

I don't think any other project has the resiliency of bitcoin. The fee issue will be solved. But I wouldn't want us to rush into any shitty solutions. This isn't a video game where the devs can hurry up and finish it and ship the product with bugs.

This isn't even an OS that has to be stable enough for most users. This is the number 1 crypto.

Also unlike a lot of the other cryptos bitcoin has never changed its rules and its rules are good. 21 Million Coins, no more.


Once the second layer (lightning network) is up and running, the first layer should become clear enough to support those onboarding lightning transactions.

[crwth]

I had a couple of instances in which I decided to convert my profits into an altcoin just to transfer for a small amount. I'm withdrawing it to another exchange and using BTC would eat up my withdrawable just because of the fees. It's expensive and I agree with you. I voted Yes on your poll just because of the same instances that we have.

If we have to compare again BTC and GOLD. They have to be similar in ways that it's going to be expensive to transfer. With the high fees now, it's like what you can pay for logistics as well. Anyway, it's going to be a stored value instead of a daily transaction thing. I think it's better that way.

Lightning would be great but I still remember the time that a user lost a couple of BTC because of it and it's not yet widely adopted. Just like what other members have posted.

What's the best currency to use for withdrawing anyway?

[tsaroz]

Bitcoin is the first of such cryptocurrency and we just need to wait and see where it heads. Many of the prediction regarding bitcoin have turned out to be false. Bitcoin is dead a dozen of times and people did argued it would never reach 50K considering the fees. And here we are using bitcoin above 50K. With less incentive, people were supposed to leave mining bitcoin but it's an ever increasing business. Time would answer the questions.