Bitcoin transaction fees will remain a problem for quite some time to come. More specifically, Bitcoin exchanges are making some interesting decisions in this regard. Unocoin, one of India’s largest platforms, has increased their transaction fees. A very problematic development, although it was to be expected something like this would happen. It will be interesting to see if other companies will use a similar approach moving forward.
Bitcoin exchanges find themselves in an awkward position right now. More specifically, they often bear the cost of withdrawal fees on behalf of users. That situation worked fine until this year. With transaction fees mounting, users are now forced to pay the cost. A logical decision, although not everyone will appreciate it. Unocoin made an unpopular decision last night. The Indian exchange will nearly double its withdrawal fees.
An Unpopular Decision by Unocoin
Do keep in mind the current new fee is still really low. A cost of 0.0009 BTC per transaction somewhat acceptable. While this represents a $6 fee right now, it is expected this will keep getting more expensive over time. More specifically, Bitcoin transactions will not become cheaper until SegWit adoption reaches a new high. That will not happen anytime soon by any means, unfortunately. Until then, we will deal with high transaction fees and nothing that can be done about it right now.
It is expected other major Bitcoin exchanges will follow a similar approach. Bitcoin users don’t like paying multiple dollars for withdrawals. It is the price to pay for using centralized service providers, though. If they could operate without withdrawal fees, things would look very different. Unfortunately, that will probably never happen until we see some big changes at the protocol level. Even then, fees like these may still remain in place for quite some time to come.
Unocoin claims higher fees are needed to guarantee swift confirmations. It is evident that may not be entirely the case, though. A higher fee is positive during network congestion. Right now, it may be useful, but it can become obsolete in a week from today. With the miners coming back to Bitcoin, things are looking pretty solid, all things considered. How this situation will evolve, remains to be determined, though. There may be more network congestion in the near future.
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