Bitcoin transaction fees surge at 9 p.m. every night, and the reason is revealed

Author: Xiu Mu

Source: bitpush.news

The researchers found that around 9 p.m. Beijing time (9 a.m. New York time) every day, transaction fees on the Bitcoin network would surge and then gradually return to normal.

A researcher who calls himself OxB10C published an article stating that the reason is that the BitMEX exchange releases a large number of transfer transactions at the same time at a fixed time every day.

The engineer believes that if the crypto derivatives exchange used more efficient technology when broadcasting trades, users could save up to approximately 1.7 bitcoins (worth over $15,000 at press time) per day in fees, or about 7% of the total daily fees paid.

"The daily broadcasting of transactions has a significant impact on the Bitcoin network and user fees," 0xb10c wrote in the report. "When users send a Bitcoin transaction, they pay a small fee. Fees fluctuate all the time, depending on how congested the network is. This is because there is a limited space for transactions. If too many transactions are sent at once, miners will prioritize those with higher fees. Those with smaller fees will have to wait."

0xb10c explained that because BitMEX broadcast thousands of transactions simultaneously at one time each day, it caused temporary network congestion and led to an increase in transaction fees.

"BitMEX broadcasts several megabytes of transactions every day around 13:08 UTC (9:08 a.m. ET), primarily user withdrawals. The effect is immediately noticeable due to a spike in transaction fees," 0xb10c said, adding that his research shows that this has been going on since at least September.

Most Bitcoin wallets have a built-in fee estimator that estimates the fee a user should add to a transaction to ensure it is accepted in a timely manner. If the network is processing too many transactions at once and the fees are too small, transactions may take longer.

0xb10c added that while users clearly prefer lower fees, higher fees can enhance the security of the network, especially after the block reward is halved.

In response to 0xB10C’s research, Nic Carter, co-founder of crypto data provider CoinMetrics, said that “if exchanges adopted better practices, fees could be close to zero.” In addition to using SegWit technology, 0xB10C suggested that BitMEX use “output batching,” an old technique that squeezes multiple transactions into one transaction to save transaction space.

He pointed out that BitMEX is taking steps in the right direction by planning to use SegWit technology, but they should not stop there.

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