Total fees have almost crossed the block reward

Summary:

In a recent discussion on the Bitcoin development mailing list, Gregory Maxwell expressed his excitement about the manifestation of a long-desired fee market in action. He believes that people paying upwards of $100 per transaction shows the huge demand to transact on the world's most secure ledger. With BTC being phased out as a means of payment nearly everywhere, he proposes that replace-by-fee (RBF) be made ubiquitous to address the stuck transaction issue. He suggests making every transaction RBF by default and then encouraging other wallet developers to do the same via outreach and education. The frustration with BTC today is less so the high fees but rather the feeling of helplessness when a transaction is stuck. Bumping a transaction's fee for users who are in a hurry would go a long way to improving the user experience.Melvin Carvalho asked how the blockchain would be secured in the long term once the reward goes away. The base idea has always been that fees would replace the block reward. While this bodes well for the long-term security of the coin, there is some legitimate concern that the fee per transaction is prohibitive for some use cases, particularly at this point in the adoption curve. Observations of segwit adoption show around 10% at this point. Watching the mempool shows that congestion is at a peak, although it's quite possible that this will come down over the long weekend. Maxwell believes that we should look at difficult to forge market signals rather than just claims. Segwit usage gives us a pretty good indicator since most users would get a 50-70% fee reduction without even considering the second order effects from increased capacity. More can be done for education though - perhaps that market signal isn't efficient yet. But we should get it there. Even independently of segwit, we can also look at other inefficient transaction styles: uncompressed keys, unconfirmed chaining instead of send many batching, fee overpayment, etc... and the message there is similar. He has seen some evidence that a portion of the current high rate congestion is contrived traffic. To the extent that it's true, there should also be some relief soon as the funding for that runs out, in addition to expected traffic patterns, difficulty changes, etc.

Updated on: 2023-06-12T23:16:13.631619+00:00