Online Bitcoin payments provider BitPay announced last week that the minimum accepted payment would be $100. This was in response to escalating Bitcoin transaction fees during the big sell off. However, just two days later, the provider backpedaled to restore the previous minimum of $5.
Last week saw Bitcoin’s biggest selloff this year, even bigger than the Chinese ICO ban in September. The crypto coin dumped 40% of its value in a matter of days, and the digital avalanche took most of the altcoins with it. When mass selling occurs, the exchanges get overwhelmed and transaction speeds grind seemingly to a halt. Conversely, the cost of sending or receiving Bitcoin escalates.
BitPay Responds
According to reports, the initial decision was explained on BitPay’s blog:
The Bitcoin network has been seeing record transaction volume in the last few weeks. This growth has also led to record network congestion and record-high bitcoin miner fees. Bitcoin miner fees are now more than $30 per transaction on average. To protect purchasers and to continue to offer service for Bitcoin payments, we are now requiring a new invoice minimum payment amount of $100 on all BitPay invoices.
Frustration reigned as traders tried to sell off their Bitcoin amid a market slide. However, the ‘hodlers’ were the victors as the coin has since rebounded back up to $15,000.
Backtracking
As the markets settled, the payments provider retracted the limit, returning it to its previous level of $5. In an updated post on Saturday, it stated that payment protocol improvements facilitated the implementation of the lower limit:
Our recent Payment Protocol improvements to the BitPay payment experience have effectively eliminated these payment mistakes. This has allowed us to make $5 or greater invoices available once again. Many invoice payments under $100 may still be uneconomical for bitcoin purchasers due to high bitcoin network fees. However, they again have the option to send these smaller payments if they choose.
To lower costs even further, BitPay is working towards implementing SegWit to their network:
We will be working in the coming months to implement Segregated Witness (Segwit) in various parts of our platform. Segregated Witness reduces the size of bitcoin transactions, allowing for an average bitcoin miner fee reduction of over 40%.
Users are urging the rapid implementation for fee reduction, but BitPay has still not made the change four months after it has been activated on the Bitcoin network.
Are you a BitPay user? Were you impacted by the $100 minimum that was in place for two days? Share your thoughts in the comments below.
Images courtesy of PublicDomainPictures, Pixabay, and Bitcoinist archives.
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