It’s always the same thing: The MemPool is piling up, and users are desperately wondering what happened to their transaction. So let’s state here once and for all that normal Bitcoin transactions are NOT there for everyday payments. There are tons of other uses and BTC coupons for each of them. If you want to see sites where you can use them, check out cryptocoupons.org.
We need to state something bluntly at this point. Stop expecting ordinary bitcoin transactions to be suitable for your everyday life. Because they are not, and you will only be disappointed sooner or later.
The same drama since 2017
You would think that some things would become common knowledge after about three years. Since the middle of 2017, it has happened again and again that the meme pool of unconfirmed transactions inflates.
There are more transactions than the miners can handle. First there are only a few thousand waiting, then a few tens of thousands of transactions, and finally there are more than 100,000. The fees to get a transaction into the block quickly increase. First to more than 10 cents, then to a few euros, and in extreme cases to more than 10 or even 50 euros. The duration of most transactions becomes unpredictable. They can be confirmed after a few minutes, but also after hours, days or even weeks. The absolute peak in the MemPool at the end of 2017 remains uncaptured.
This first happened on a massive scale in the summer of 2017. The blockchain traffic jam escalated at the end of 2017. For a short time, more than 250,000 transactions remained unconfirmed, fees reached up to 50 euros per transfer. Since then, in a weaker form, it has happened again and again. Generally, it has stayed at less than 100,000 unconfirmed transactions, a mem pool of no more than 50 megabytes, and fees of little more than one euro. The most annoying thing that could happen was that the wallet paid too little and you have to wait an uncertain amount of time. This alone causes annoyance and frustration for many users.
In the last two weeks, the MemPool swelled again, as a direct and predictable consequence of the halving. With up to 109 megabytes of unconfirmed transactions, this was the biggest traffic jam since the end of 2017, and the fees for quick confirmations briefly shot up to more than 5 euros. In the meantime, the situation has calmed down again, even if you still have to pay at least one euro for a quick confirmation.
Disappointing sooner or later
Of course, Bitcoin works flawlessly most of the time. 9 times out of 10, a transaction goes through smoothly with fees in the single-digit cent range. If you are not in a hurry, you can still send a transaction with low fees. It may just take a few days for it to arrive. Basically, you should inform yourself before the transaction.
I usually look at Jochen Hoenicke’s MemPool visualization. The lowest chart shows the MemPool in megabytes, staggered by megabytes. There I look at which fees I end up with in a range of less than one megabyte. That’s currently 80 satoshi per byte, which is about 16,000 satoshi or 1.31 euros for a simple transaction – a fee level where I avoid a transaction unless absolutely necessary. Depending on the wallet, I still use RBF to be able to increase the fees afterwards.
A look at the current MemPool shows that a fee of 80 satoshi per byte will likely make it into the next block.
- The procedure is of course a bit complicated: You’ll need to look at the MemPool, know how big a transaction is in bytes (about 200 to 300 bytes), and then convert the satoshi into euros. But even then, you’ll still have to pay the fee or be prepared for an almost unpredictable time to confirmation. All this makes one conclusion unavoidable: for the vast majority of people, Bitcoin is not suitable as an everyday means of payment.
- I’m sorry to say that so bluntly. Stop thinking of Bitcoin as an everyday means of payment. It may be that it works most of the time. But you will be disappointed sooner or later. Maybe Satoshi planned it differently at the time. But that’s the reality in 2020, so the sooner you accept that and start looking at alternatives, the better. And of course there are.
- The possible alternatives fall into two categories: First, you can transport Bitcoins not on the blockchain, but offchain or via sidechain. Second, however, one can simply use another cryptocurrency.
Cutting a swath through too many solutions
Well. Now you’ve heard of Lightning and Litecoin, Dash and Liquid, Ether and WBTC, Bitcoin Cash, BitBucks and XRP. And you only wanted to pay with Bitcoin. It has, unfortunately, become so complicated. So what to do to avoid drowning in the confusion?
In itself, it’s not that complicated. If you hold Bitcoins primarily as an investment, it doesn’t affect you that much. To still be able to pay with Bitcoin, you can transfer some money to a Lightning-enabled wallet, such as Phoenix, and maybe also to BitBucks. At the same time, you can download a multicoin wallet, such as Jaxx, Exodus or Coinomi. Then you can buy Bitcoin Cash with Euros at Bitcoin.de or exchange some Bitcoin for Litecoin or Dash. With this setup, you’ll be able to pay pretty much anywhere Bitcoin and cryptocurrencies are accepted.