Total transaction fees in bitcoin are on the ascent, challenging a key claim put forth by bitcoin acolytes in the early days: that the bitcoin payments network could compete with the mainstream banking system on cost.Some are inclined to disagree this was ever the case. So here’s a quote from Nathaniel Popper’s seminal investigation into bitcoin mining in 2013, noting:Miners, though, are among the virtual-currency faithful, believing that Bitcoin will turn into a new, cheaper way of sending money around the world, leaving behind its current status as a largely speculative commodity.But, it must be stressed this cheapness rhetoric was everywhere at the time. Even Bill Gates was pushing the line that bitcoin’s best attribute was its cheapness. We disagreed, noting the costs were only being disguised temporarily by the mining award system — and that this wouldn’t last for long.Reality, however, is finally catching up with bitcoin. Fees are escalating due to capacity constraints being imposed on the network on account of blocksize limitation as well as the reduction in bitcoin mining awards:If unresolved such constraints will impede further scaling of the network and make bitcoin prohibitively expensive for day-to-day transaction use.
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Total transaction fees in bitcoin are on the ascent, challenging a key claim put forth by...