Bitrefill CEO: Bitcoin Blockchain Fees Will Not Reach Peak 2017 Levels Ever Again
Fees Will Not Reach 2017 Levels, Says Bitrefill Exec
Cryptocurrency has many benefits that have endeared it to its users and that also gives it an advantage over fiat currency. One of these is the low transaction processes associated with so many cryptocurrencies. This has been seen in the sending of large amounts of cryptocurrency with a very little amount in transaction cost among various networks.
While transaction fees for sending cryptocurrencies had been steadily declining, there was a recent uptick in the crypto price transaction fees which has had some users worried. At the height of the bear market, transaction fees were around 3 cents but recent transaction fees of are hovering at around $1 and $2 and due to this change, several people have been stating that transaction fees for crypto are going to see record highs and that other alternative ways should be considered for transaction value between various wallets.
No Cause For Alarm
However, Sergej Kotilar, the chief executive of Bitrefill, has taken to Twitter to explain that while the fees are getting higher, it has not gotten to the point where it is a cause for alarm. He attached some graphics which show the mempool which also coincides with the higher fees that we have been seeing. However, the mempool is not even visible on the chart and is less than 10% of rates from late 2017 to early 2018. Als,o the existence of these exchange batch transactions and size change in form of Lightning network means are there different ways to send value between exchanges. Also, the current level of on-chain activity comes from speculative activities from investors who want to send their bitcoin to exchanges during price volatility.
“Alright, time to talk about fees and mempools again. While I claim to have been right in my prediction a year ago that we won't see any longer period of high fees, it has occasionally happened lately that the mempool doesn't clear out overnight,” he said.
Events that have taken place in the last 18 months, he feels, have ensured that prices will be fairly stable over the near future and there is no cause for worry.
“So there’s no reason to think 2017 will return any time soon. Au contraire, once exchanges turn on Lightning or Liquid these spikes will disappear as well. But in any case it makes sense to scale the things we can scale. There’s a couple companies that still stand out here,” he stated.
Another factor to consider is the fact that exchanges such as BitMEX and Coinbase do not batch their transactions which leads to a lot of space on the mempool being taken up for no benefit. In the case of Coinbase, transactions occur across the day while in the case of BitMEX, they all move in one single massive batch.
It is important to get some official word from someone who is prominent in the industry about the issue and also some reassurance that the 2017 levels will not be repeated in the near future. The graphics attached also give an interesting review of just how much token movement across exchanges by different parties at different times and in different batches affect the transaction price.