Who is hurt by Bitcoin’s high transaction fees?

As the Bitcoin block size debate continues, unconfirmed transactions pile up, and the minimum fee to send Bitcoin continues to rise. Here are some things we've taken for granted over the past year that have become impossible due to high fees.

Bitcoin withdrawal

"Physical" Bitcoin exists in various forms. At the beginning of Bitcoin, there were physical currencies with values ​​ranging from 1 BTC to 1,000 BTC. "Physical" Bitcoin created later usually only contains small amounts of BTC.

The value of the Bitcoin chips produced by BTCC starts at 1 mBTC. If you want to extract the Bitcoin in it, the transaction fee will be higher. This also makes the chip worthless and can only be a collectible.

Roger Ver once complained on Twitter:

Core's small block fee hike policy has resulted in @YourBTCC's physical Bitcoin being worth less than the withdrawal fee. How ironic.

Spending small change

Every transaction generates change outputs. Sometimes these change outputs are less than 1 mBTC, which means that from an economic point of view, this change cannot be included in the transaction input. If change is added to the transaction, the transaction fee will be much larger than the transaction amount. Every day, there are about 5 BTC outputs (change or other forms) that cannot be spent.

Tips

In the early days of Bitcoin, content publishers would often include a Bitcoin address in their articles. Readers who thought the articles were worth reading would tip the author a small amount of Bitcoin. Although this method is still technically feasible, a $1 tip would likely require a $2 transaction fee, so no one would be willing to tip. This is called microtransactions. Microtransactions are no longer feasible due to high fees.

The community remains optimistic

The solution to high transaction fees is simple: increase the transaction capacity of the Bitcoin blockchain. Whether this is achieved through the deployment of larger blocks or Segregated Witness (SegWit) is another long and protracted debate. However, the Bitcoin community remains confident that a potential solution will be introduced.