At the end of 2017, the commission for a Bitcoin transaction reached an unprecedented amount for a transfer of $ 30. You could give 100% of the commission. By the beginning of 2018, the situation had stabilized, but the issue of commissions still worries users. People are afraid of a repetition of the December situation and are looking for opportunities to reduce the cost of commission for Bitcoin transactions. Is it possible to do this? We will describe it in this article!
Blockchain, as you know, is a chain of blocks generated by miners. Each block includes transactions. A confirmed transaction is a transaction that is included in a block. In other words, for the transfer of bitcoins to take place, it is necessary that this event be recorded in the Bitcoin blockchain.
At the dawn of Bitcoin, there were few people willing to transfer money, but there were those who wanted to disrupt the work of the blockchain. Hackers could attack the Bitcoin network, sending instantly hundreds of thousands of transactions, and the network was hanging. To avoid regular attacks commissions were invented.
By the standards they were insignificant – 0.0001 BTC for 1000 bytes. When Bitcoin cost $ 10 or even $ 100 for ordinary people, such amounts did not matter. But the total size of hundreds of thousands of transactions would require significant expenses from hackers, which, of course, frightened them away.
For the system to function, commission transactions must have priority when included in a block — unlike transaction without commissions. The sequence principle did not work here, so choosing the transactions that went into the next block was provided to miners.
Hackers who want to bring down the network and literally pay for it, were very rare. At the same time, there were only a few ordinary users who wanted to transfer money, so the opportunity to conduct a free transaction was still there.
Just transactions with commissions were included in the block first, and transactions without commissions – a little later. However, in view of the small number of those who made commissions, those who wanted to save had not long to wait (usually 15–30 minutes).
The commission is debited from the user’s account above the transfer. For example, if a user wants to transfer 0.2 BTC and set a commission in the amount of 0,0003 BTC, then 0.2003 BTC will be deducted from his account.
The amount of commission is indicated by the user at the stage of setting all the parameters of the transaction – the transfer amount and others. In the commission field, you can put a zero value or arbitrary – the amount that the user is willing to pay.
There are “recommended” commissions – mainly for users who are not oriented in their size. The recommended commission is the commission at which the transaction will be included in the nearest blocks with a high probability.
“Recommend” the commission as a special resource, and directly wallets. In the latter, the recommended commissions are indicated in the commission field when filling in the transaction parameters. This value can be changed in some wallets and in some – it is impossible.
The size of the final commission depends on the size of the transaction, and the size of the transaction is the size, more precisely, the “weight” of the program code, which is any transaction. Measured in bytes.
The “weight loss” of a transaction is basically the addresses of the senders of the recipients. For example, a simple transaction can “weigh” about 400 bytes, and a complex one – over 1000 bytes. The algorithm for generating a transaction code is publicly available, and if desired, anyone can figure out where it comes from.
Now Bitcoin has become much more popular than in 2010, and tens of thousands of people regularly want to transfer it. Blocks are mined more slowly than appear willing to commit a transaction. As a result, from the transactions that are sent by users to the network but have not yet entered the block, that is, are not confirmed, a queue is formed.
At the same time, miners still choose transactions that include new blocks. Here begins the most interesting part of the user who needs to confirm the transaction, it becomes necessary to motivate the miner to choose his transfer from all those in the queue.
There are people who need to transfer them urgently in any queue to transfer money, and people who can wait. If the queue is very long, there are a lot of “hurry-ups”, and each of them sets a slightly higher price than the others, so that the miner can choose his transaction.
Other users are forced to focus on this amount, otherwise they risk not transferring money at all against the background of transactions with large commissions, nobody will choose their transaction with a small commission – and they will “hang”. As a result, the commission may reach unjustified amounts.
Before the New Year, for example, due to the upcoming holidays and due to the summing up of annual totals, the number of crypto transactions, as well as money transfers in the traditional market, has increased.
However, on the Bitcoin market at the same time two more events occurred – an unprecedented growth of Bitcoin (up to $ 20 thousand) and the introduction of Bitcoin futures. All these factors were summed up – and in the end we received astronomical commissions.
It is logical to assume that the commissions will grow further as the number of users of the Bitcoin network increases and the competition between those who want to complete the transaction will increase. This is only partly true.
To the people who are oriented in the cryptosphere, the aforesaid became obvious long ago, therefore they tried to solve the problem more than once. One attempt – Segregated Witness, or abbreviated as SegWit – can simplify the situation.
If you do not go into technical details, then SegWit increases the throughput of the Bitcoin blockchain. Thanks to technology, more transactions can get into one block. It means that transactions will go faster.
So far, few cryptoresources have integrated the SegWit technology and it is being introduced slowly due to a lot of criticism. However, the number of such resources is growing, so after a while, it is possible that transactions will speed up, and the commissions, respectively, will fall.
It is also possible that in the future there will be other solutions, since the blockchain developers who are dissatisfied with the blockchain by SegWit are still working on the problem and sooner or later they will come to something else.
It is difficult to predict anything about the future size of Bitcoin transaction fees, because there are too many variables in this equation. Among them
Now we come to the main question – is it possible to reduce the cost of commissions for Bitcoin transactions or are such attempts fraught with a hang and loss of money?
Restrictions can set any cryptoresources, as well as any cryptoresources can inflate commissions, block the possibility of their reduction and change, and so on.
It is best to do without intermediaries in the form of “recommendations” and independently determine the size of the commission, which at the moment will allow transferring Bitcoins without lags.
To do this, go to the mempool (mempool, memory pool) – the place where the queue of unconfirmed transactions is formed, and see which transactions with which minimum commission were included in the last generated block.
Then you can set a commission on your transaction a little higher than the last minimum among confirmed transactions. The probability that it will turn on in the next blocks is quite high.
You also need to carefully choose a wallet. Bona fide resources allow the user to change the recommended fees at his discretion. If the wallet itself decides how much the user must pay, it makes sense to change it.
You also need to remember about the technical side of the blockchain, the amount of commission depends on the size of the transaction, and not on its amount. That is, an increase in the number of addresses will entail a weighting transaction and an increase in commission. A one-time transfer of 0.5 VTS will entail 5 times less expenses than a five-time transfer of 0.1 VTS (with the same queue).
If the queue began to grow very rapidly and completely unfounded, there is a chance that this is an attack attempt. Those users who need to send bitcoins on an urgent basis are unlikely to be able to do anything, but for those for whom urgency is not important, it is better to wait out the attack. It can be delayed.
You can choose cryptoresources that support SegWit, or keep track of who is going to integrate this technology in the near future. Despite the criticism, SegWit is quite a working technology, at least for now.
In conclusion, it should be said that ultimately the user should remember two things: the Bitcoin network allows him to decide for himself which commission to pay, and that one should not blindly trust other people and their resources, but it is much more profitable to think and calculate everything yourself.