Businesses Adjusting to Lower Bitcoin Fees

Fees have been dropping on the bitcoin network for many different reasons and more businesses are getting on board with lower fee solutions. This includes large companies like coinbase starting to finally use segwit and batching transactions, which alone has lowered the mempool by a sizable amount. There will always be people that try to spam the mempool with thousands of low fee transactions but it is becoming more expensive to do so and there might not really be a point in the long run.

Multiple exchanges are reacting by lowering the costs for withdrawals that were raised a few months ago after the huge hike in fees. Bitpay, Binance and Kraken have all lowered fees by almost half in the last few days in reaction to the lower fees. This is only going to continue as more companies jump online, but it might change if another rise happens and volume skyrockets. Times when the demand is high is when the network sees the largest bump in the mempool which partially means that exchanges were the big part of the problem. The hope is going forward it will have less of an impact on fees if demand increases.

Segwit has been around for a year or so now and only at this point in time are many companies finally rolling out updates to their platforms. After heavy pressure from the community in the last two months coinbase finally focused their attention on making implementation a priority and we are seeing the results. Were seeing currently about 30% of transactions being segwit which is going to continue to rise over time. It might not be an end all be all solution, but the hope is it will hold us over until different implementations of tech can be made, specifically the lightning network.

The Lightning Network and other layer 2 solutions will hopefully lower the mempool to levels that we havent seen in a very long time. Lightning shouldnt be used for transactions that are high priority or supposed to be censorshipless, but it will provide aid for many people who just want to use bitcoin for everyday use. Buying small things like coffee or other microtransactions with bitcoin becomes a real possibility. If you look at how large the Lightning Network has become in the last few months, primarily how many channels there are now, you can see that there is great potential.

Like I said I think this is only the beginning and more companies will be lowering fees to stay competitive in the next few weeks. Im hoping some bigger players also implement segwit usage as default in the future. With the new bitcoin core wallet release we should see that happen in my opinion. Fees might raise in the short term for many different reasons but there is actually progress being made. It may be slow but we are moving towards a more usable and scalable bitcoin.

-Calaber24p