Bitcoin miner fees have increased significantly for the last six months causing a lot of network transactions to costs even more. The Bitcoin website announced last week on Bitpay increasing the price of the company’s invoice fees to include miner fees. Recently, Coinbases announced as well that their service will no longer include covering network fees and the cost will be the customer’s responsibility from now on.
Companies Does Business Model Changing Because of Transaction Fees
The cost of on-chain transactions are getting more expensive recently, with only 69 cents for the usual miner’s fee in every transaction as of writing now. Many bitcoin enthusiasts just shrugged off this issue for they understand that it’s the price a person should pay for this payment system which is decentralized. But, bitcoin-based businesses have a hard time taking into account these on-chain transaction cost thus deciding to change their business models.
Fiverr, a freelancing website announced this past January that they would cease having bitcoin for their services. Bitcoin enthusiasts hypothesized that the company may have stopped operations because of sluggish transaction times and more expensive fees. There were bitcoiners who received an email last February from the Egifter company saying that the only accepted transactions are from Coinbase. Community members still thinks that the reason was because of transactions price and hypothesizes that Coinbase would aid the business resolve off-chain.
Subsequent to these news, Bitpay announce they would increase the company’s invoice rates. Bitpay explained:
Coinbase Passes on Transaction Fees to Customers
Coinbase, a bitcoin exchange based in San Francisico and also a brokerage company announced on March 14 that they would cease paying on-chain transaction charge. The fees will be passed on to customers and designated it for customer withdrawals, it detailed;
Coinbase explained that starting March 21, 2017 they will cease paying the on-chain transaction fees already. They now have more than 6 million users globally so this will be a significant cost for them. Fees will be designated dynamically according on the conditions of the current network and will be shouldered by the customers when they transfer on-chain transactions. But in between Coinbase accounts, transaction fess will remain to be free and off-chain.
Because of the increasing fee market, Bitcoin companies have started to protect themselves. With the rate the fee is increasing, many bitcoin-based business considers realigning their respective business models to offset costs in the future.
Author: myBTCcoin – Bitcoin & Litecoin Mining Pool