I just noticed through blockchain wallet that the regular bitcoin fee (to send a slow transaction, not a priority fast one) is over $2.00 once again. Right now, bitcoin for coffee transactions everywhere have been halted as a result [joke].
What's often called the 'mempool' of the bitcoin blockchain is once again climbing. As we approach SegWit Activation and the awesome $5,000 price target, past problems are creeping up once again.
17 Months ago there was up to 25,000 unconfirmed transactions in the backlog. But as low as 1,200
February this year there was about 20,000 to 40,000.
I've seen as high as 100,000 at the really severe times.
Right now there is 43,000+ - (Archive Post)
What This Means
Bitcoin is still on the way to crowding out small transactions. Those micro-transactions the early adopters and free market Libertarians and Anarchists dreamed would be the use case for this revolution in software and money. If you tried to buy a coffee in a reasonable amount of time (from a company expecting for a confirmation to confirm your payment, as is the tradition in bitcoin transacting) you'd need to pay a fee around $3 or 50% fee (or tax we could say) for a $6 cup of coffee!
Is SegWit Solving the Problem?
SegWit is set for activation after the two week grace period (roughly a week from tomorrow). I've heard that this change in software will allow 2x or more the available number of transactions per block. Sounds like a good start, but the SegWit2x we were promised in the New York Agreement is not happening until late November. At that point it may not even happen, and could cause the split of bitcoin into yet a third chain. With Bitcoin Cash rolling along at $300, maybe it is time to look at that 8MB fork of BTC.
Waiting
At this point in the cryptocurrency game we're waiting. Waiting on a number of things:
- Waiting on SegWit to activate and prove itself stable on bitcoin [Approx Wed Aug 23]
- Waiting on SegWit2x fork to 2MB blocks after SegWit is activated [Approx Mid to Late November, but likelihood unknown]
- Waiting on Bitcoin Cash to prove itself as an altcoin or a real future alternative to SegWit adopted bitcoin - When will we know if the market wants 8MB blocks or Lightning Network?
With all these items up in the air, it's more important than ever to keep your bitcoin secure (and to profit from bitcoin cash and any future splits as well).
As Bitcoin Magazine said over a month ago:
At the time of writing this article, it’s hard to say how best to deal with this situation. For a regular user, it’s always best to hold onto your private keys, and it’s probably best not to transact at all until the situation resolves in some way or another. (For more information, see this article.)
FURTHER READING: Love Jimmy Song's analysis.
He goes over the SegWit and 2MB Hard fork differences:
"In other words, you can expect miners to mine around 2MB blocks with Segwit only and 4MB blocks with Segwit and 2x hard fork. What you can be sure of, however, is that miners will maximize the weight of each block as miner profit strictly increases with block weight. Blocks, then will have close to 4,000,000 weight with Segwit only and 8,000,000 weight with Segwit and 2x hard fork."
SOURCE