At this moment in time (August 2017) BitCoin has a major problem, which frustrates me every time I am about to do a transfer.
The issue is so big that just a few days ago there was effectively what you could call a Bitcoin civil war. So divided was the community on the future of Bitcoin that a completely new digital currency called Bitcoin cash was formed to address this major issue. What is the issue you ask, quite simply scalability of the Bitcoin network and more specifically what that means for users of Bitcoin like myself – HUGE FEES!!!
Honestly, I can’t understand how it got to this point when the original vision was to create a new form of an economy with instant worldwide payments and little to no fees as compared to traditional banks. They got the first part right in the form of instant global payments but due to the large load on the network, Bitcoin miners are able to charge astronomical if not extortionary fees to do business on the network.
To be fair it’s not entirely the miner’s fault but more on that below.
Let me give you an example from today.
I invest in a Bitcoin cloud mining company called – Genesis Mining. For me, this is a good way of investing in this new future economy, without needing expensive and noisy Bitcoin mining rigs.
But as I was about to transfer the Bitcoin from my wallet to Genesis I took one heck of a gulp when I saw the network fee I was about to be charged. My order with Genesis was only $36 or so and the network fee I was about to be charged was $8.16!!! that equals 23% transaction charge.
Do you see what I mean when I said earlier EXTORTIONARY! Not even the greediest banks on the planet charge their users that, but in all honesty, it is not the miner’s fault, it’s the Bitcoin network and they know things have to change and I really hope they do and quickly if Bitcoin truly is to become mainstream.
I believe it will, which is why I invest in Genesis but there was no way I was going to continue with that order and pay that miners fee. However I still did invest today in a new mining contract, I only decided to use a different cryptocurrency – Litecoin.
I’m a huge fan of Litecoin and when you hear the network price they charged me on that $36 contract you will understand why. So what did Litecoin charge? A measly (16 cents, or 0.4%) – now that is something I can get onboard with and why I think Litecoin is arguably in an even better position right now than BitCoin to truly go mainstream.
Maybe they need some extra help with branding and vendor partnerships before that ever could happen. The same could be said of BitCoin honestly. Hopefully, because Charlie Lee has left Google now to work on Litecoin full-time we will see more business partnerships becoming a reality.
On a side note: I really wish Genesis Mining still had some contracts left to mine Litecoin. They currently only have Bitcoin, Ether and Monero contracts left. However you can sign up to their email list here and as soon as Litecoin mining becomes available again, their subscribers will know first. At least that is what they told me when I enquired about Litecoin mining. Genesis please bring back Litecoin mining!!! Pretty please…
Now let me end this somewhat of a rant (needing to get it off my chest) post by saying I don’t feel that the issues with Bitcoin are insurmountable. They have already agreed unanimously on segwit2x, which is a scaling solution and they have other updates in the pipeline.
But for the sake of the network and the cryptocurrency climate, please hurry up Bitcoin! I can’t handle these fees anymore!