Bitcoin transaction confirmation time and fees
The landscape for Bitcoin continues to intrigue and be unpredictable. This is especially true when it comes to Bitcoin transaction confirmation time and fees. We’ve had a lot of feedback over these past months as transactions sometimes have not been as close to instant (~10 mins) as one may have hoped when sending payments over the Bitcoin network. Industry pioneer, Erik Voorhees sums up these points in his excellent blog post.
The source of increased fees and confirmation times is a result of the popularity of Bitcoin — this is evident both in the rising price and number of bitcoin transactions. It is clear that balancing growth and sustainability of the Bitcoin network is still a work in progress. How this scaling debate plays out between software developers working on the protocol, miners, and vested interests is yet to be seen.
For CoinJar itself, our part in the industry landscape is that of on-boarding users and providing them an interface to Bitcoin. A practical and user friendly a solution increases the participants in the digital currency economy making it more diverse and resilient. One enabling factor CoinJar has made to achieve this is the ability to send bitcoin transactions completely free of charge by completely subsidising it. Inputting fee amounts, estimating them based on network congestion, and hoping you do not make an error, further steepens Bitcoin’s learning curve.
From April 3 2017, we will begin charging a transaction fee for sending on-chain Bitcoin transactions with CoinJar Points. The trifecta of a strong rise in the bitcoin price, the cost of relaying transactions, and the increased number of transactions has seen a massive spike in covering costs. While this current increase is not indicative of how Bitcoin’s fee structure will look like in the future, what it does reflect is that totally subsidised transactions on CoinJar are unsustainable for the company (and most wallet services) at this point.
Irrespective of proposed solutions to scale Bitcoin, the graph below presents factually what our company has been doing to completely subsidise transaction fees.
CoinJar will charge a fixed 25 CoinJar Reward Points or a 0.0005 BTC fee per transaction. This enables us to continue subsidising fees at a more sustainable rate while being competitive in the fee market. This will result in quicker turnaround times when sending Bitcoin.
To help transition, new and existing users with CoinJar Rewards activated by the April 17, 2017 will receive a one-off 100 Points bonus. This is equivalent to four free Bitcoin transactions.
If you already use our exchange services or CoinJar Swipe, by activating your Rewards account you should be able to continue sending Bitcoin transactions at a fraction of the cost it normally would. By buying your workday morning coffee with CoinJar Swipe, you can earn 25 Points or 1 free Bitcoin transaction every week.
We strive to solve user experience hurdles with creative approaches in the digital currency space. CoinJar’s vested interest in the Bitcoin scaling debate is to advocate for the end consumer. A large and diverse user base of digital currency holders is just as an important part of the bitcoin infrastructure as Bitcoin code and mining.
The following Knowledge Base article provides more information on the mechanics of the new changes.