I was always wondering if High fees can be a barrier to Bitcoin Adoption. The recent events especially the ones after this year have proved that it shouldn't be a barrier. However, I'm still thinking that it can be a small problem if this has to a cryptocurrency highly used for transaction purposes. But I don't think Bitcoin would anyway be used for transaction purposes and that is one of the reasons why we have other cheap cryptocurrencies.
The year 2021 started very well with a 1.5 Billion USD investment in Bitcoin from Elon Musk. Many new investors too got into the DeFi world and crypto world. Apart from this PayPal, Mastercard also announced that they would start accepting crypto payments to support the merchants. These were all indeed great news for the Bitcoin investors or crypto investors in general. In spite of all these things, there are still some issues in accepting Bitcoin as the payment method. One major issue is the high transaction fees which can be a barrier to use Bitcoin as a transactional currency.
Transactional fees of Bitcoin
During the early days, it wasn't a big deal to spend a little on the transactions due to the low price. But in the last few years, the cost has increased drastically making it unusable for daily transactions. The time taken for block confirmation is also huge so that if someone sends funds from one wallet to another wallet, we have to wait for a few hours to receive a confirmation on the transaction and to get the funds credited.
Usually, it takes 6 confirmations from the miners to complete a transaction and the cost can vary depending on the demand. During the last bull run in 2017, the transaction cost was as high as 55 USD and the same is happening in this year's bull run as well. This time it is even worse because of the scalability issues and more demand.
High fees made way for new cryptocurrencies
Bitcoin Cash is one of the popular cryptocurrencies that emerged trying to solve the problems Bitcoin had. I think BCH had been really successful in solving the transactional issues but still for someone who works more on the free transactional blockchain, I personally consider even BCH transactions are costly but definitely better than Bitcoin I should say.
There were also a few more cheap coins that emerged trying to solve the high fees barrier Bitcoin has. People who are new to the Blockchain world or the crypto world would transfer Bitcoin from wallet to wallet. Those who are going to hold them for a longer period can have bitcoin in their wallets but for those who are going to use it only for trading, purpose uses some cheap cryptocurrenices instead while transferring funds from one exchange to another exchange. This is already happening and traders know how to mitigate their transaction fees.
Bitcoin can be more like a Crypto for pride than a usable cryptocurrency
We all know that the usability and use case for Bitcoin is very minimal. Some businesses still try to use Bitcoin as their transactional cryptocurrency just because Bitcoin is very popular. But even they have started exploring altcoins to make their transaction seamless and reduce the fees involved in transactions. I personally think that people who hold Bitcoin today and even in the future would do it only for the purpose of booking some profit or as pride than using it as a transactional cryptocurrency.
Future generations would wonder if someone had Bitcoin in their wallets because the pumping is not going to stop and towards the end of this year the price can even touch 100k per coin. If that happens people will hold BTC in their wallet just as a pride more than having it as a transactional currency or something with usability.
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