Bitcoin commissions have reached the minimum level for the last year

If you previously refused bitcoin transactions because the fees were too high, now is the time to act: the fees have reached the lowest level in the last 12 months.

According to the Twitter account Bitcoin Core Fee, on March 25, the commission was record low. The fee for making a transaction of a certain volume was received in the next block was 1 satosh per byte. In addition, the processing of the transaction now takes less than 10 minutes.

Information about Twitter advertising and confidentiality
Bitinfocharts, in turn, argues that the average commission has reached a minimum over the past year. When bitcoin in December 2017 cost about $ 20,000, the average fee was $ 55.

One of the many reasons that can explain this decline is that large organizations use transaction bundling to reduce commissions.

Its role is played by the decision to scale Segwit, launched in the network of bitcoins in August 2017. It optimizes the size of blocks, reduces commissions and speeds up transaction processing.

Bitfinex or Bitstamp are just some of the crypto-exchange platforms that started supporting this solution. At the moment, 31% of bitcoin transactions are processed using SegWit addresses, and this share is growing.

The bitcoin community is waiting for the implementation of another scaling solution — the Lightning Network, with which bitcoin can process millions of transactions per second. Theoretically, the implementation of the Lightning Network involves commissions that are close to zero, as well as almost instantaneous transactions. In this case, the stores will massively begin to accept crypto currency as a means of payment. In the meantime, we can just enjoy low commissions in the bitcoin network.

The percentage of bitcoin transactions using SegWit doubled

The percentage of SegWit transactions in the bitcoin network in the last few months, according to segwit.party, was at the level of 10-15%. In recent weeks, several key players in the bitcoin ecosystem (in particular Bitfinex and Coinbase) have included SegWit support, which led to an increase in the volume of SegWit transactions in each new block to 30% in less than two days. In addition, the latest version of Bitcoin Core, the bitcoin reference software, allowed users of wallets to create SegWit addresses for receiving payments. And, as more exchanges, wallets services and other users of the system accept SegWit, the total network bandwidth will only grow.

SegWit is an improved method for processing bitcoin transactions by making more efficient use of block space and correcting the malleability bug, which increases the network bandwidth.

On the other hand, large blocks mean an increase in the size of the complete node (nodes), which can be negatively reflected at the decentralization level of the network (although studies have shown that this should not become a serious problem in the long run and allow everyone to launch their own full node).

It should also be noted that increased bandwidth is likely to help relieve congestion in the short term, as the user base of bitcoin continues to grow.

A more important aspect of SegWit in the long term is to correct the plasticity error of transactions, which will allow using a more efficient implementation of the Lightning Network (LN). It is expected that this second level protocol will largely be able to solve the problem of scaling bitcoin this year already. With the introduction of LN, bitocoins will be limited to the number of users on the network, rather than how often they want to make transactions.

The nature of the bitcoin network makes it difficult to understand which companies exert the greatest influence on the recognition of SegWit, but the size of the American Coinbase (whose CEO claims that it stores about 10% of all the bitcoins in circulation) indicates that the company is now playing a decisive role in this. It is assumed that Blockchain, the most popular web wallet, accounting for about 40% of all bitcoin-transactions, integrates SegWit before the end of March this year.

After the December fever, bitcoin again becomes «quick and cheap»

In the last months of last year, commissions for bitcoin transactions have grown significantly, and with them the volume of unconfirmed transactions in the memPule has also grown. For example, during the peak of bitcoin in mid-December 2017, a commission of more than 1,000 satoshi / bytes was required to be included in the next block.

For a standard transaction (without SegWit) at a bitcoin rate of about $ 15,000, the commission was about $ 75 (commission is paid in bitcoins, and the dollar value of the transaction is related to the current rate).

The growing commissions fueled the discussion that the major players in the industry were not quick enough to implement the SegWit protocol update, and several successful implementations of the Lightning Network technology had to bring the fees closer to zero at all.

Nevertheless, the block space in the bitcoin block has very limited possibilities: one way or another the block will not be able to accommodate more than several thousand transactions. This constructive feature is important for encouraging the development of a competitive commissions market, designed to ensure network security in the long term.

In the distant future, when the reward for the creation of the blocks disappears, the incentive for the miners to maintain the network will be only commissions for transactions. Each halvening («halving» once every four years of release of new bitcoins) increases the reward of the miners by commissions, as bitcoin is approaching the limit of its fixed offer of coins.

At the same time today, bitcoin transactions have again become cheap, even if we do not take into account the comparatively low rate of the crypto currency. At the time of publication, the commission was about 34 satoshi / bytes for inclusion in the next block (10 minutes waiting) and 16 satosh / bytes for inclusion in one of the next six blocks (one hour).

The largest stock exchanges continue to implement SegWit, and the network now employs more than 800 nodes of the Lightning Network, which daily increase its throughput.

Commissions are and will be an integral part of bitcoin, but for the most part the transactions of the main crypto currency are still a viable alternative to traditional bank transfers.

How it all began: An announcement of the very first version of Bitcoin from Satoshi Nakamoto

Yesterday, on February 26, the official release of Bitcoin Core 0.16.0, the 16th generation of the original bitcoin software, took place.

In this regard, we decided to recall the very first release, which took place more than nine years ago, on January 9, 2009. He was introduced by Satoshi Nakamoto in an electronic mailing to a narrow group of Shifropankov and was ignored by the media.

This correspondence is especially interesting because it preserved the views and hopes of people who were engaged in bitcoin in pure enthusiasm and did not know what impact it would have on today’s understanding of the economy and the monetary system.

So, the historical release was a small letter:

«Announcement of the first release of bitcoin — a new electronic cash, which uses a p2p network to prevent double spending.

It is completely decentralized: without a server or centralized power. Screenshots on bitcoin.org.

Download link: http://downloads.sourceforge.net/bitcoin/bitcoin-0.1.0.rar

So far, only for Windows. Open source code is included in C ++.

The software is still at the alpha stage and is experimental. There are no guarantees that the system will not need to be restarted at any time, although I did everything I could to make it expandable and versioned.

You can get coins by asking someone to send them to you or by running «Options -> Generate coins to start a site and create blocks».

To begin with, I made the Proof-of-Work complexity ridiculously low, so that a typical PC will be able to generate coins for a few hours in a while. This will become much more difficult when competition forces you to automatically raise complexity.

The generated coins must wait 120 blocks to «mature» before they can be spent.

There are two ways to send money. If the recipient is on the network, you can enter his IP address and connect, get the public key and send the transaction with comments. If the recipient is not on the Internet, you can send funds to his bitcoin-address, which is a hash of the public key that he gave you. It will receive a transaction that will be included in the block, the next time it is connected to the network.

This method has a disadvantage: you can not send information in the comments, and the percentage of anonymity can be lost if you use the address several times. But this option is useful if both users can not be online at the same time or the recipient can not receive incoming data.

The total number of coins will be 21,000,000. The new coins will be distributed among the nodes that produce the blocks, and the number of coins will be reduced by half every four years.

The first four years: 10,500,000 coins;
the following four years: 5,250,000 coins;
the following four years: 2,625,000 coins;
the following four years: 1 312 500 coins
etc…
When this is over, the system will continue to support commissions for transactions, if necessary. The system is based on open market competition, and there will probably always be nodes ready to process transactions for free. »

Satoshi Nakamoto

Already at that time bitcoin was «betting» and predicting a staggering cost to him. On January 11, the late Hal Finney, the famous American programmer, who the next day became the world’s first recipient of bitcoins, responded to Satoshi’s letter:

«It is interesting that the system is configured for a certain maximum number of coins that will ever be created. I think the idea is that the amount of work required to create a new coin will increase over time.

One of the main problems in the case of any new currency is its valuation. Even if you ignore the practical problem (no one will take the currency first), it is still difficult to argue for the benefit of a particular non-zero coin value.

As an amusing thought experiment, imagine that bitcoin becomes the dominant payment system used throughout the world. Then the total value of the currency should be equal to the total value of all the riches in the world. Known to me, current estimates of total world wealth range from $ 100 trillion. up to $ 300 trillion. If you translate this into 20 million coins, then the cost of each will be $ 10 million.

Thus, the opportunity today to generate coins with a cost of several cents of processing power can be a pretty good bet with compensation in the ratio of 100,000,000 to 1! Even if the chances of bitcoin to achieve the above described success are small, is this really one chance against 100 million? There is something to think about … »

Hal

As early as October 5, 2009, the Bitcoin rate was first published on the New Liberty Standard exchange. It amounted to 1,309.03 BTC for one dollar, and on December 16 the version of Bitcoin v0.2 was released.

«Whales» became even richer during the market collapse

A hundred so-called «whales», that is, the largest owners of crypto-currency, successfully took advantage of the fluctuations in the rate. According to data collected by Bitinfocharts.com, most of the 100 richest bitcoins did not lose their assets during the last crash. On the contrary, their shares have increased exponentially.

For example, the largest address contains more than 167,000 BTC (at the time of publication). The address began collecting bitcoins about two years ago, and the first deposit was about $ 840 at the current rate. Currently, the wallet contains $ 1.4 billion. The largest revenues were recorded during the major crashes. Throughout 2017 there were six major corrections, in which bitcoin lost about 30% of the cost. Just in these periods, the largest deposits were made.

The same picture is typical for other large addresses. Many of them sold thousands of bitcoins from November to December 2017. The community constantly monitors «whales», and often on forums or on Twitter you can see messages about the movement of assets at their addresses. For example, on November 12, 2017, when the bitcoine rate reached a new price high, observers observed that 25,000 bitcoins were sent to the Bitfinex stock exchange from the purse of the notorious Roger Vera.

Many media outlets suggest that 1000 addresses own 40% of the market. Some believe that «whales» know each other and this leads to great speculation in the market. Kyle Samani, managing partner of Multicoin Capital, supports this theory and says:

I think that there are several hundred guys who can call each other. And they, most likely, and do.

Nevertheless, a study published last fall disproves the assumption that 1,000 people have 40% of all bitcoins. According to the data collected by Bambou Club, many models of the distribution of bitcoins, analyzing wallets and addresses, do not stand up to criticism. Bambou Club draws attention to the fact that most assessments can not determine the relationship between the owner, wallet and address. The report says that this is not necessarily a ratio of 1: 1: 1:

One person can have a lot of wallets. And the purse can use a lot of bitcoins (for the sake of anonymity it is desirable to generate a new address each time you use your wallet).

Using another method of data collection, Bambou Club concluded that there are more than 25 million bitcoins owners, and 0.153 BTC is enough to enter the 30% of the richest. Moreover, you only need 15 bitcoins to enter 1% of the rich.

We do not know if the «whales» work together to speculate at the cost of the bitcoin course. But we know that during periods of various market fluctuations and especially during the period of the fall of the exchange rate by almost 70%, many of them became even larger players.

Who are these rogueurs and why they determine the cost of bitcoin

Every day more and more investors agree that the invention of bitcoin led to the creation of a new asset class.

Whether the price of bitcoin will grow in the same way as last year is an open question, but it is obvious that crypto-currencies can not so easily disappear in one day. Despite this, many world-renowned economists and Nobel laureates still do not understand the value of bitcoin.

With the creation of a new asset class, the complex question of assessing their fundamental base value arises. Profit and loss statements can be used to theoretically estimate the traditional means of saving, but for bitcoin such data are not available. In recent years, several different schemes for assessing the currency have appeared, but price forecasts based on traditional analysis usually end in complete failure.

In the community, from time to time, the theory is discussed that the trailers have the greatest impact on the bitcoin price, and transactional turnover is not so important. But for some reason they do not pay much attention to it.

In early 2014, this point of view was devoted to the whole article, although the concept in it was stated theoretically, and not proved with the use of empirical data. The main idea is that the price of bitcoin (in US dollars or any other fiat currency) as a whole will be determined by the desire of the holders to redeem it from circulation.

To better understand this theory, you need to delve deeper into the strategy of the chopper and find out who it is.

No, it’s more than a typo in the word holder. And no, this is not an abbreviation of hodl, which stands for holding on for dear life («grabbing for life with all my might» or «holding on to the last»).

Hodl is a meme that appeared in a drunken post on the Bitcointalk.org forum back in late 2013, when the price of bitcoin collapsed amid news related to the regulation of crypto currency in China.

The essence of the post was in the priority of long-term storage of bitcoins as opposed to day trading, and the meme became a kind of motto for the owners of crypto-currencies, who are ready to hold their assets in any market situation.

And now the traitors are not going to leave. They are the main support group for collapses of 25% per day or 50% per month. Moreover, on such landslides they only make purchases.

Chodlers believe in the value of bitcoin on an almost religious level. Some of them keep bitcoin for political reasons (they would prefer that it is the world’s main currency, not the US dollar or another fiat), others simply see in it the inevitable future of the financial system. The Hodgers keep it because they are convinced that bitcoin is digital gold. They understand the value of a censorship-free form of electronic money in an increasingly digital world.

In other words, the crocheters are the basis for the cost of bitcoin. As soon as a sufficient number of people sell their stocks, there will remain the trailers, who will want to buy even more and increase the volume of their assets.

A real holler will never sell bitcoins. Instead, he will patiently wait for the day when their use will become ubiquitous, and daily transactions will be carried out through an open digital payment system. A well-known meme based on the scene from the «Matrix» says that by that time the trailers will no longer need to sell their bitcoins, because there simply will not be a reason to bring them to the Fiat.

A long-term logger and PayPal board member Wencesz Casares argues that bitcoin will eventually become a global, policy-independent standard of value and trust.

In the long term, it is the cholesterics that have the strongest impact on the cost of bitcoin, but is there a way to measure their collective impact? The answer is no.

The key problem is that it is difficult to detect tracers in a blockhouse. It is unclear whether someone is a real tractor until a couple of serious crashes happen.

Co-founder FundStrat Tom Lee compares the total number of addresses of bitcoins and the average amount of transactions (in dollars) between these addresses to determine the common user base. But, again, not all of them are tracers.

Last year, a LendEDU study was published, which indicated that conventional Holders would sell for about $ 200,000 for bitcoins, but they were Holders, not Rollers. Perhaps many of those who participated in the survey sold their bitcoins during one of the sharp price drops over the last month. Price jumps, as a rule, show who the real hoopler is, and who is just a Holder.

Each short-term price bubble of bitcoin attracts new users to this asset, and some of these can turn into choppers. Therefore, instead of looking for information that can be used to predict the daily price movements of the most popular crypto currency, it is better to listen to the advice of a drunk beatcoin enthusiast of the 2013 model and just keep to the last.

Based on the article «The Fundamental», «Bitcoin Valuation Metric That Determines», «The Cryptocurrency’s Price Moves» by Kayla Torpy

Bitcoin.org site stopped advertising bitcoin as «fast» and «cheap»

The Next Web publication drew attention to the fact that Bitcoin.org (not to be confused with Bitcoin.com, which is closely linked to the competing Bitcoin Cash crypto currency) has changed the advertising of bitcoin.

Now instead of telling the public about «fast» transactions and «low commissions», the site advertises the technology as allowing to carry out p2p-transactions, international payments, and also to defend against scammers. You can see the changes in the English version of the site, and in Russian, speed and cheapness are still moving forward.

By changing advertising slogans, it can be assumed that bitcoin developers are beginning to view technology more as a digital asset than a real currency.

Recently, several technical solutions to the problems of low speed and insufficient efficiency of transactions in the bitcoin network have been proposed, but none of them has yet won the wide recognition of the crypto community. The most famous and expected solution is the Lightning Network protocol, which is already beginning to be tested in the main network.

In the meantime, the users are faced with a rhetorical question whether they should pay a commission of $ 20 for a transaction of $ 10. When it comes to small amounts, other crypto currencies may be preferable to bitcoin in this respect.

Prize in a new game on Steam will be one bitcoin

Motherboard reports that on the online service of computer games Steam appeared a new puzzle game from the developers of Gem Rose Collective called Montecrypto: The Bitcoin Enigma («Montecrypto: riddle of bitcoin»).

The game will be launched on February 20. It is a set of 24 puzzles that the player must unravel by moving around the maze. The reward for the solution is bitcoin.

Players can solve puzzles on their own or together with other users. Participants are allowed to leave hints for others or confuse them with false clues that lead to a dead end. In the end, only one lucky person can win bitcoin.

The game costs $ 1.99, and the price of one bitcoin is now slightly more than $ 9,800, so the luckiest and savvy user is shining a solid jackpot.

In the Frequently Asked Questions section of the game, Motherboard journalists found a link to the GitHub page with btcrecover, the password for the bitcoin-wallet and the recovery tool. The GitHub page explains that btcrecover is designed for cases where users know most of their passwords, but need help in trying to work out different possible combinations.

The developers said they would disclose their identity when the winner presents the rights to bitcoin. While they limited themselves to the following:

We are a group of game developers, the authors of this insane game concept. Being big fans of games in the genre of «treasure hunting», we drew inspiration from such a puzzle game as Sur la trace de la chouette d’or, in which, in 1993, somewhere in the territory France was hidden statue of a golden owl. At the same time, a set of textual riddles was published. Until now, no one has been able to solve them and get a statue of gold, silver and diamonds weighing 15 kg.

The book of puzzles «In search of the golden owl,» which no one has ever managed to «pass through», even became a reason for the trials.

Motherboard journalists turned to Steam with the question of whether or not players will be able to receive a reward. Judging by what is written in the rules of registration, it is possible.

In addition, journalists asked the developers why they prefer to remain anonymous, but the answer has not yet followed.

11 companies from the list of Fintech 50 from Forbes are closely connected with the blocking and crypto-currencies

February 13 Forbes for the third time presented a list of Fintech 50, which includes the 50 largest companies in the field of financial technology in 2018. It is noteworthy that 11 of the listed companies use blocking technology or work closely with the crypto-currency industry.

The founders of The Bitfury Group, Coinbase and Ripple, the three companies that entered Fintech 50, were also on the Forbes list, entitled «The richest people in the crypto currency industry», published last week.

Forbes also presented a separate article that analyzes the impact of blocking and crypto-currency companies that are on the Fintech 50 list.

Forbes writes that these companies, which «we do not notice» because of the endless media coverage of the price volatility of digital currencies, «build an infrastructure that supports both open crypto currency markets and initiatives that can significantly change how financial transactions are executed and recorded «.

The same article Forbes identifies nine companies as «the future of blocking and crypto-currency.» Five of them this year for the first time were in the rating. For each of the nine companies, brief information is provided on its activities, founders, funding and on whom it «threatens».

For example, Blockchain is represented as «the most popular crypto-currency purse in the world», which represents a serious competition for Coinbase and Xapo. Chain, which offers office technology for blocking and software for balances in the registries of fi nite companies and e-commerce enterprises, appears as a threat to «inefficient storage of records in the financial sphere.»

Veem and Robinhood also included a list of Fintech 50, but Forbes does not mention their connection with the blocking and crypto-currencies. Veem is a system for sending and receiving payments for businesses using blocking technology, and Robinhood is a stock trading application that recently announced the launch of Bitcoin and Ether (ETH) trading.

Tim Draper: «I lost 40,000 bitcoins»

In 1985, Tim Draper founded DFJ — now one of the most famous venture companies in the San Francisco Bay, which at one time invested in Skype, Tesla and Twitter. At the same time, Draper is not among the traditional venture capitalists: unlike most «colleagues», he is a big fan of bitcoin and blockade.

Draper became interested in digital currencies back in 2002, when he met a man from South Korea who wanted to buy his son a virtual sword for his birthday. Draper remembers:

Everyone in South Korea played this virtual game. He was going to pay real money to buy virtual currency, and then buy a few pixels on the screen in the form of a sword. Then I began to think that with virtual currencies something can turn out.

In an interview with Fortune, Draper discussed investing in bitcoin, the departure of Steve Jurvetson, and talked about missed projects, which he regrets most.

— Crypto-currencies and block cattle are on hearing today. As you know, you have made a number of investments in this area. In 2014, you bought 30,000 bitcoins from the US government — these coins were seized after the closure of the Darkkarket Silk Road. Why did you do this?

«Long before buying the bitcoins left from Silk Road, I paid $ 250,000 for 40,000 bitcoins. These coins were on the Mt. Gox. Then Mt. Gox lost or stolen them, depending on how you look at it. When this happened, I just threw up my hands and thought what kind of nonsense this was. How is the largest (at that time) exchange can lose all the money — or still steal them? So I decided that it was over.

I was disappointed with the loss of 40,000 bitcoins, but when the Silk Road auction began, I thought, «Maybe it’s a chance for me to take part in it again.» The people who participated in the auction thought they would get bitcoins, because there were a lot of bitcoins, but I offered the price much higher than the market price and got them all.

— In Davos, US Treasury Secretary Stephen Mnuchin said that his number one goal is to prevent the use of crypto currency in illegal activities. What do you think about this statement?

— It is interesting that the US Marshals Service is much easier to catch the criminals who use the block, in comparison with those who use cash, because the block is the ideal registry. They will not be caught on the very theft, but they will be caught when they try to spend money. Blocks get a mark when something illegal happens to them. Criminals may not know anything about this, but as soon as traffic is noticed in the detachment, they will be caught.

I really think that bitcoin is safer for all of us and is protected from criminals who are used to using dollars. I know what people thought two or three years ago: they were troubled by the nasty atmosphere around bitcoin, but now we think that in reality it’s easier to catch criminals in a detached unit compared to those who use dollars.

— You were one of the first Americans to become e-residents of Estonia. Do you consider the possibility of obtaining citizenship over time?

«I think that geographic boundaries are eroding, we can already freely move around the world, and people from many other countries too. We can choose the country, state and city, which will suit us.

Estonia was the first, but other countries now also create electronic governments that take on many of the functions of traditional governments. Many things can be done virtually: storing data about citizens, redistributing income, health insurance, social security and well-being … Much of this can be done on the blockbuster. And all this challenges our ideas about what a government is.

As Estonia starts to provide more such services, they can capture an increasing and larger share of the global market. Think about it! If Estonia starts to offer a better health insurance plan than the US, we simply say: «Oh, why do not we use it?» Or, for example, a more effective way to ensure the well-being of citizens …

Control brings poverty, while freedom brings prosperity and wealth. We are in a very good position, because we have a democracy and we are adopting new ways of thinking. We are more inclined to adopt new technologies, introducing them and transforming the work of the government. I think that the US is well prepared for this.

As an investor for the next 10 years, I will keep track of what is being done for the government on the detachment and what is useful is done for bitcoin. This is the beginning of something more: in my whole life I have not seen anything like it.

— Are there any investments that you have not made and still regret it?

— I discussed investing in Google. I was sitting with Sergey Brin on a plane, and he explained in detail to me the idea, from which I was just delighted. But the partners said that in our portfolio there are already six search engines and in others there is no sense. I said, «I really like these guys, and the name is pretty,» but that was not enough.

We also missed Facebook. My daughter was a big fan of Facebook, and I knew that it was something special, but after making a number of bets, we quit the game, because our bets were not high enough. They started with an estimate of $ 20 million and rose to $ 115 million — that’s when we jumped off. Then we lost, and it was a complete bummer.

And then for other reasons we missed Airbnb and Uber. So yes, I missed everything.

— Ilon Max appears on the news daily. You know him well. Is there something that most people do not know about him?

— I think that his management style is really unique. He shares with people a science-fiction vision. He says: «We’re going to Mars.» And he is ready to accept all criticism from people who think he is crazy. But then, going to Mars, he will take all the best engineers in the world and invite them to work for him.

I want all entrepreneurs to think so — they took the first step and were not afraid to say «we will cure cancer,» «we fly to Mars» or «we will change the government.» I want them to do this, then their missions will attract people’s attention.

— DFJ went through difficult months (partner Steve Jurvetson was dismissed, and after that, accusations were made against a DFJ in a sex party at one of the events). There are different versions, and I would like to hear from you about what is happening.

«As for me, I started managing Draper Associates and spend most of my time in San Mateo.» I’m still one of the leaders of DFJ, so what’s going on affects me, too, because I’m running the company. But the money I manage is now in Draper Associates.

Yurvetson was a wonderful partner and just a good guy, he worked with us for so many years. It was an honor for me to work with him, and the DFJ partners cope with the information tsunami as well as possible in the current situation.

— But you were co-founders. How do you personally and the company cope after his departure?

— Over the years, we are used to the turmoil that occurs when investing in the most advanced things in a very volatile financial world. Difficulties are inevitable. This is a great race, and it continues.