Bitcoin Fees Rise to Discount-Cancelling Levels as Lightning Network Use Remains Low
Bitcoin’s fees continue to rise as Lightning network relief remains elusive.
Tried the Lightning Network. Still sucks (ease of use is non-existant/ fees make it unreasonable).
…seems more like an excuse to pay node operators for "liquidity".
— Omar Bham (Crypt0) (@crypt0snews) June 27, 2019
The Lightning network, Bitcoin’s prime off-chain scaling solution, has yet to gain significant enough traction and usability to provide significant relief to the network’s congestion issues. According to data from BitcoinVisuals, across nearly every metric from nodes, channels, capacity, capacity per channel, channels per node, and capacity per node, peak metrics were achieved around mid-March of this year, with a slow but steady decline since. Cryptocurrency YouTuber Omar Bham noted on Twitter that based on recent experiences the network is not yet ready for mass use, as its user experience is still lacking.
Bitcoin fees make even significant discounts untenable
In absence of a heavily-used off-chain scaling solution, Bitcoin’s network fees remain high, to the point of cancelling out heavy discounts. According to data from BitcoinFees.info, the fee for a transaction to be included in the next six blocks, or over an hour’s wait time, is over $6 USD.
As recently posted on the /r/Bitcoin subreddit, a gas station in La Jolla, California is reportedly offering a $0.40 discount per gallon on gasoline when paying in Bitcoin. At shown prices of upwards of $3.60 per gallon, this equals a discount of about 11% on purchases. However, with Bitcoin’s current transaction fee levels, in order to take advantage of this discount a user would need to buy over 15 gallons of gasoline, which is higher than the entire capacity of many smaller vehicles, in order for the discount to overtake the transaction fee. Additionally, depending on the demands of the business, on-chain confirmations may be required before completing a purchase. This could potentially add hours to purchase times in order to reduce the risk of double-spends, or the merchant may choose to factor in the risk and increase prices.
Dash continues to keep fees low while increasing capacity, speed, and security
While Bitcoin struggles to maintain usability for everyday payments, Dash continues to innovate in this area. At time of writing, Dash fees are currently a small fraction of a cent, and network stress tests show that this fee level can be maintained at levels over 3 million daily transactions with ease, nearly 10 times Bitcoin’s current network traffic. Additionally, nearly all Dash transactions are now InstantSend by default, meaning that they can be trusted as settled and final instantly, rather than having to wait for confirmations. Finally, ChainLocks, which protects the network against 51% mining attacks, is set to be activated in the very near future.
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