The development of scaling solutions, along with a decline in Bitcoin transaction throughput, has resulted in bitcoin fees falling below $ 1. A so-called “Bitcoin whale” (someone who owns large amounts of bitcoins) took advantage of these falling fees and moved 48,000 bitcoin for just four cents.
A $ 290 million transaction for four cents
High Bitcoin charges were the topic in December 2017, when they reached $ 50 for a short time as the network confirmed nearly 400,000 transactions per day. Since then, transactions have halved and dropped to an average of 200,000 a day.
This decline in transactions has enabled Bitcoin to clear Mempool as the network clogged in the second half of 2017 through transactions. According to Blockchain.info, the number of transactions waiting for confirmation has dropped from an average of 100,000 to 5,000.
It has been widely speculated that Bitcoin’s critics, intent on ruining Bitcoin’s credibility and reliability, intentionally increased Bitcoin transaction fees. These are said to have littered Bitcoin blocks with ‘spam’ transactions. Others observe that the exponential increase in transaction fees was also due to Bitcoin’s growing interest.
The BTC Wal has executed a Bitcoin transaction valued at over $ 290 million for four cents. The transaction took place last night when the Bitcoin user transferred 48,500 Bitcoin. A Twitter user has phrased this appropriately:
“Can you imagine trying to move $300M for $0.04 using the traditional banking system? No, no you can’t.”
For years, the crypto community has been seeking a way to minimize transaction fees while increasing bitcoin transaction throughput.
Scaling Solutions: Segwit and the Lightning Network
Segwit an improvement in the Bitcoin network that changes the transaction format of BTC transactions. Segwit dramatically reduces transaction size, reducing fees while allowing more transactions to be stored within a block. This protocol, which was activated in August 2017, has already become established in the network, as over 36 percent of all transactions now run on Segwit addresses.
The implementation of the Segwit protocol was crucial for the Lightning Network, another scaling solution, to work. The Lightning Network is an off-chain scaling solution that promotes the use of Bitcoin for micro payments. This special scaling solution uses balance sheets, payment channels and multi-sig-addresses. By using this system, thousands of transactions per second could be done for minimal fees.
Blockstream, the leading developer of crypto currency infrastructure and development, recently announced that adoption of Lightning Network has grown at a breathtaking pace.
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