Mon. Feb 3rd, 2020



Incredible Increase in Transaction Fees on the Bitcoin Network

3 min read
Incredible Increase in Transaction Fees on the Bitcoin Network

The blockage in the Bitcoin (BTC) network caused transaction fees to break records.

Bitcoin (BTC), the world’s first and still the most valuable cryptocurrency, experienced an incredible increase on April 2 and managed to climb over $ 5,000 by April 3. BTC, which experienced an increase of around $ 1,000 within hours, naturally caused investors to mobilize and this negatively affected the Bitcoin network. The blockages in the network are very common, especially in the bull market, but this week’s sharp rise is seen as one of them.

What Causes Bitcoin Network Blockage?

In a possible rise of Bitcoin, the network is blocked by users who want to invest their BTCs in stock exchanges and trade, but the reason for the transaction fees is slightly different.

The main reason why the Bitcoin network is so prone to congestion in a possible rise is known as hasty and opportunistic investors. Since miners choose to approve the most commissions on the network, investors who prefer to have their own transactions done fast and send their BTCs to the stock exchanges faster, giving more transaction fees, which leads to very difficult wage levels for normal investors.

Another way to avoid clogging and record transaction fees is to get help from the Lightning Network protocol, not using the main network. LN, which was developed after the blockage experienced during the bull period in December 2017, was designed to allow Bitcoin investors to transfer payments faster and is not preferred by many investors, but it has become quite big and useful with its total capacity of 5.3 million dollars.

What Causes the Rise in Bitcoin?

Market intelligence firm Flipside Crypto claimed that the rise in the crypto money market was triggered by the re-activation of inactive wallets.

The reason for the rise in the cryptocurrency market is not yet clear, but Flipside Crypto analysts attribute it to the re-awakening of large Bitcoin wallets.

Flipside Crypto

According to a report by the market intelligence company Flipside Crypto, Bitcoin and altcoin wallet activities have increased dramatically over the past two weeks. This increase can also be seen as a sign that the adoption of cryptocurrencies is on the rise again.

About 50% of the Bitcoins in circulation were held in their inactive wallets for more than a month. Flipside Crypto said that this rate has decreased to 10% since March 15 and there has been a significant increase in wallet activities over the last few weeks. Flipside Crypto’s founder Eric Stone said:

“The good news for cryptocurrency defenders. There are more and more people now considering buying Bitcoin.”

Stone also emphasized that the rise in wallet activities and the activity in the cryptocurrency market should not be directly related to the cryptocurrency whales. Instead, the move in digital wallets should be perceived as the awakening of small investors, Stone said. Cryptocurrency investors are probably interested in crypto money again after the long and still crypto winter of 2018.

Blamed Whales

Stones, which stated that the whales do not have a big share in the rise of crypto money after the 15-month season, showed the cryptocurrency whales as the perpetrator of the big fall in November 2018. Recall that in November last year, Bitcoin suffered a loss of approximately 40%.

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