Those who purchased Bitcoin in mid-March following a steep price drop well below the $5,000 mark thanks to the spread of the coronavirus are laughing all the way to the decentralized bank just two months later with the price sitting around $9,700 at the time of this writing. Trading that Bitcoin for goods, services or other cryptocurrencies however might just wipe the smiles off the collective faces of investors. That’s because the cost of a Bitcoin transaction is up more than 1,200% during a roughly four-week span from April 11 to May 14, 2020.
Where Bitcoin Transaction Fees Are At Now
Consider for a moment that the seven days since the Bitcoin halving event have seen the transaction fee drop by more than 30%. In total fees have moved from roughly $4.60 per transaction to $3.44.
Still, the overall effects of the halving event have been massive during the past month, with a total increase of 800% in the cost of doing business on the Bitcoin network. Even for a volatile asset like digital currencies, an 800% increase is a lot to stomach. And yet, even with where the fees it so that now, the fact that they have jumped from $0.38 all the way to $5.16 within a month is absolutely jaw-dropping. It’s just too bad gamblers and investors alike couldn’t bet on the price of transaction fees rather than the price of Bitcoin itself. There would have been a lot more money to be made if that were the case.
Considering all of the above, the current cost of doing business on the Bitcoin network pales in comparison to when the currency was at its all-time high at the end of 2017. At the time, fees were reaching 10 times higher than that they currently are. That’s right! Users on the Bitcoin network were paying between $40 and $50 per transaction.
Why Skyrocketing Fees Are a Good Thing for Bitcoin
When transferring Bitcoin began costing users more than $40 for one transaction, the community of developers supporting the network rallied. The whole point of creating a decentralized peer-to-peer payment system after all is to take power away from governments and central authorities. Charging a small time Bitcoin holder $40 for a transaction and accomplishing the broader mission is thus impossible. Since that time developers have instituted tools like SegWit and The Lightning Network to enable users to create payment channels and to enable the network to continue rewarding miners while charging lower fees to users.
It’s obvious that as Bitcoin’s newly halved mining rewards add less and less new Bitcoin into circulation, the value of said Bitcoin will continue to rise and so will the corresponding fees associated with transferring those coins across the network. This means more innovation is necessary, and given Bitcoin’s now rich history, it’s coming!
So What Does This Mean for Gamblers?
With very little sports to gamble on during this current coronavirus-plagued world we live in, there were only two ways for gamblers to make money with their digital currencies. Either hit poker rooms and table games in search of a quick way to double up, or benefit off the price appreciation of Bitcoin. Those who have a penchant for picking lucky numbers are getting opponents to fold are now benefiting from the double whammy that the currency’s dramatic price increase over the past two months is creating for those lucky few.
Of course the downside of that luck is that it will now cost a bit more to do withdraw profits from a bankroll, but gamblers will almost surely be okay with that given that the value of their Bitcoin’s work twice what it was in March.