BTC.com Lowers Bitcoin Transaction Costs Through Dynamic Fees and SegWit
6 months ago admin2 Comments Off on BTC.com Lowers Bitcoin Transaction Costs Through Dynamic Fees and SegWit
BTC.com, the first bitcoin wallet platform in the cryptocurrency market to integrate Bitcoin Cash and SegWit simultaneously, has recently implemented a dynamic fee system to automatically calculate the lowest fee users can attach to have their transactions processed on the Bitcoin blockchain network.
In a blog post published on January 11th, the BTC.com development team revealed that it had completed the integration of a system which calculates optimal bitcoin fees based on three criteria: time pressure, network peak times, and size of the transaction.
For bitcoin users, having to check the size of the bitcoin mempool and network peak times can be inconvenient and difficult. Many users do not have the technical knowledge to analyze the network peak times and often end up spending more in fees than are required to have their transactions processed by miners.
In order for bitcoin to appeal to the general consumers as both digital gold and a digital currency, it should not place the burden on users to undergo an inefficient process of consistently evaluating the size of the bitcoin mempool and the size of transactions to process simple payments. The placement of such a burden significantly restricts the accessibility and usability of bitcoin as a digital currency.
Several wallets like BTC.com have begun to implement software to prevent users from attaching high fees while avoiding the complicated process of analyzing peak times. The dynamic fee system introduced by BTC.com automatically calculates fees based on the three above mentioned factors to ensure that the user pays the lowest fee possible for bitcoin transactions.
In addition to the integration of the BTC.com dynamic fee system, the wallet provider has also integrated Segregated Witness (SegWit), a transaction malleability fix and scaling solution developed by the Bitcoin Core developers, to further decrease the size of transactions.
The BTC.com development team emphasized that the number or amount of bitcoin does not impact the fee. The size of the transaction data, which becomes larger if the transaction has been sent or received many times, affects bitcoin fees and reiterated the importance of Segwit.
“Despite the common misbelief, the amount of bitcoin you send does not impact the fee. What impacts the fee is the size of the transaction data. Without going into details, when users receive many small transactions frequently, the size of their transactions tend to become larger. If you often make bitcoin transactions, choose a wallet like BTC.com that has support for Segwit,” explained the BTC.com development team.
As well as the dynamic fee system and SegWit implementation, BTC.com has also been working on integrating the new Bitcoin Cash address format in their wallet, to ensure that bitcoin users do not confuse BTC and BCH addresses. While Bitcoin Cash is a hard fork of bitcoin, it is not bitcoin, and thus, BTC.com developers implemented the new address format to help users distinguish between bitcoin addresses and those for the BCH altcoin.