Bitcoin Transaction Fees Altering its Ecosystem
Bitcoin (BTC) transaction fees entail the amount charged for your proceedings to be handled by a miner and approved by the Bitcoin network.
BTC has grown to unprecedented heights in the last ten years as it is dubbed the “king” of cryptocurrency. Various shortcomings have, however, been witnessed as users are forced to wait for lengthy periods for their transactions to be incorporated into the blockchain. This lag has been detrimental because it has triggered the materialization of fees that users are expected to pay for them to be moved ahead of the waiting line.
Transaction fees not part of initial BTC system
Maureen O’Hara, a professor of economics at the Samuel Curtis Johnson Graduate School of Management, asserted: “Bitcoin now works essentially how markets work because if you want something to happen faster, you have to pay for it.”
She also asserted that transaction fees were exempted from the original BTC system because they have just evolved.
O’Hara added: “A system that’s designed by a computer scientist for security problems may not be well-designed to trade in the markets, so the development of fees is actually a good thing. But it also created all kinds of problems.”
O’Hara proclaimed that the fees might assist the faster processing of some proceedings, but the cost endured was making many transactions impractical. She also stated that one of the significant problems of BTC entailed the high fees charged even for simple deals.
O’Hara made a comparison of the present BTC transaction fees with a parade where one onlooker stands to get a better glance, and in the process, making other onlookers follow suit.
She claimed: “If everyone is standing up, you’re not seeing any better than you were when you were sitting down.” And if everybody’s paying a transaction fee now, then you may end up in the same situation that you were in before – the fees got high, and you have to wait anyway.”
The transaction backlog is also associated with high energy amounts because blockchains are notorious power consumers.
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