To many regular participants in the Bitcoin economy, there may have been a sense that in the final months of 2017 transaction fees were rising quite significantly. There was a noticeable increase in transaction traffic across the latter part of the year, with an initial spike of high fees in late November preceding a huge rise in mempool activity throughout December.
This high traffic results in upwards pressure on required fees; as transactions with lower fees fail to confirm, wallet fee selection pushes users to higher and higher fees in order to get a transaction confirmed promptly. This feedback effect resulted in a significant backlog of unconfirmed lower-fee transactions through December and January which have only recently cleared.
Stories circulated citing extreme examples of high fees, with certain cases claiming fees exceeding the total funds sent. The growing costs prompted increasing community discussion of best-practice for fees, segwit adoption, transaction batching, and some debate over the practices and responsibilities of the largest Bitcoin companies.
We also began to see first glimpses of the developments with the Lightning network, which has been touted as a future solution for handling greater transaction volume without high fees. The last period of high mempool activity coincided with Bitcoin prices reaching all-time highs, resulting in the equivalent fiat-cost of transactions skyrocketing.
As an example, at the height of the high traffic in December, fees of over 1000 satoshis per byte were required for inclusion within the next block. For a standard, non-segwit transaction with minimal inputs and outputs that would result in a fee of ~0.005BTC. Read more from coinjournal.net…
thumbnail courtesy of coinjournal.net