Apparently an increase in Bitcoin (BTC) network activity brought about by speculation surrounding the block halving has caused Bitcoin (BTC) transaction fees to spike to over $5 at times. Once again this proves that Bitcoin (BTC) has serious scalability issues and is not ready for global adoption.
Specifically, data shows that through April 27 Bitcoin (BTC) transaction fees were below $1, which has been the usual throughout late 2019 and 2020. However, on April 29 transaction fees spiked to $3, and by May 13, around the time of the block halving, transaction fees rose to over $5.
Further, the data referenced above is the average transaction fee for each day. It is likely that at some points around the time of the block halving Bitcoin (BTC) transaction fees spiked as high as $10.
Although the block halving was now a week ago, the congestion on the Bitcoin (BTC) network continues and transaction fees are still in excess of $3.
This is due to congestion lingering in the Bitcoin (BTC) mempool. During the peak of the congestion there were over 80,000 unconfirmed transactions totaling over 70 mb in the mempool according to Johoe’s Bitcoin Mempool Size Statistics.
Considering that each Bitcoin (BTC) block can contain at the most only 1.3 mb of transactions, this means it would take 54 blocks to clear out 70 mb of mempool congestion, which would take 9 hours. However, this assumes no further Bitcoin (BTC) transactions, so it actually takes days or weeks to clear out such a large backlog of unconfirmed transactions.
As of this writing the Bitcoin (BTC) mempool continues to have over 50 mb of unconfirmed transactions, and is not making much leeway towards getting through this pile, despite blocks being completely filled for over 10 days.
Aside from the increased transaction fees which reached unacceptable levels at points, the main damage that a congested Bitcoin (BTC) network causes is that some people’s transactions may not be confirmed for days or weeks.
Indeed, imagine sending a Bitcoin (BTC) transaction for the regular fee of less than $1 anytime during the past few weeks. That could lead to the transaction being stuck for days or even over a week, since the mempool backlog has to be cleared before low fee transactions are confirmed.
Now imagine how frustrated any individual or merchant would be if their Bitcoin (BTC) transaction was stuck for even several hours, let alone days or weeks, and how that individual or merchant would probably want to use a fiat option instead of Bitcoin (BTC) after that.
This simple thought experiment reveals how Bitcoin’s (BTC) scalability issues are crushing the potential for Bitcoin (BTC) adoption. Literally, whenever the Bitcoin (BTC) network gets congested, Bitcoin (BTC) is losing an untold number of users.
Further, Bitcoin (BTC) has no chance at becoming a global currency in its current state, since apparently even a modest increase in traffic congests the entire network.
Indeed, if Bitcoin (BTC) were to become the global currency today, transaction fees would be hundreds of dollars, and numerous people may have to wait weeks or months to get a transaction confirmed.
It is critically important for Bitcoin (BTC) to be redesigned to be more scalable. Until then, Bitcoin (BTC) will keep shooting itself in the foot via unacceptable transaction fees and slow confirmation times whenever there is a surge in network activity.