I sent $ 25 Bitcoin from one address (in Coinbase) to another (Kraken). – $ 25 sent

– $ 16 fee

– $ 41 total 40% of the total fee transaction. incredible – Kristian Freeman (@imkmf) December 8, 2017

Ready to send your first bitcoin? It will be $ 26 please …

Of course, it's at the limit of what you could pay to use the bitcoin blockchain today, but if you're new to the cryptocurrency world (and you've got it not invested so much), we understand to see such a sky … a high sum could be a shock. (Sorry, Kristian!)

Despite what you may have heard about "the money of the future," the fact is that bitcoin (and other cryptocurrencies) are both expensive – and experimental – today. # 39; hui.

Although it's not what you're used to (or even what you subscribed to when you buy), the reasons behind blockchain costs can help you understand the technology, its weaknesses, and the needs of the ecosystem. the spirits to improve.

OK, so what is it that costs in the first place?

For starters, you probably think that this money is going somewhere. And that is, not one place.

When you send a cryptocurrency transaction, you pay for it to be included in the protocol blockchain, which you can consider as an official record of all tokens in the network (bitcoin, ether, or more exotic). Rather than holding it in a bank or credit card company, this register is distributed.

This means that if a computer (or a group of computers) goes down, the network keeps a copy indicating that you own your resource. The bad news is that you have to pay all these computers to process it.

Here we will introduce the first person on our course, the minor (or validator, depending on your network).

You do not necessarily know who he or she is, or who verifies your transaction – but they do work, so to speak, dedicating computing power, setting aside parts or doing another cost-prohibitive function for help the network to determine which transactions to include in which block of the chain.

For this, they are rewarded by a new cryptocurrency "hit".

OK, but why so much?

If it's confusing, you can think about it like that.

You see, every cryptocurrency transaction is made up of a small amount of data, and most block chains have limited space for that data as a reference for all these transactions.

In this way, the transaction fees represent how much you are interested in making your transaction, at that time, and stored on the network permanently. As you can guess, the higher the transaction costs – which minors (or validators) can get – the greater your chances of getting your transaction in the next block processed by the miners are high.

Although limits and data changes vary from blockchain to blockchain (bitcoin has a coded limit of 1 MB per block), developers and engineers generally advise against over-increasing the limit, as this can lead to a variety of technical issues.

Until recently, most crypto users did not really notice these data limitations because the networks did not handle them. But as a new wave of crypto investors and enthusiasts comes on the market, generally pushing demand upwards, these data limitations are tested and associated costs increase (see chart below). ).

But what right do I have to add?

Even though this does not seem the case, the fee increase is actually a sign that bitcoin, ether and other cryptocurrencies are gaining popularity and popularity. But on the other hand, as it is a fairly recent development, your wallet might not be equipped to make your job easier.

In the end, many portfolios (the software that provides the interface with your cryptocurrency) make you decide, giving you the power to determine the amount to pay.

Yet, transactions without charges or with too low fees when using peaks remain in limbo.

They are not outright rejected, but it can take hours or even days for the network to cool down and the miners to add the transaction to a block. In addition, as mentioned above, the higher the fees, the more likely your transaction will be recovered by the miners.

Deciding which fee is useful, however, is difficult.

To help users determine what price is right, various sites offer calculators, and even some developers have intervened to try to make this calculation less headache.

So, what's next?

The other option, and arguably the most daring one, is to switch to less used cryptocurrencies today.

Still, the infrastructure around these options may still be limited (bitcoin cash, for example, has fewer merchants than bitcoin), and as such, you need to be aware that not only could you have transaction problems, but development can continue to fix the vulnerabilities.

In the longer term, blockchain engineers from several of the largest blockchains are working on a range of "off – line" solutions that could help technology to more users, while dramatically reducing the cost of ownership. network usage and your transaction fee.

Although we do not know when these solutions will be ready to be deployed on the blockchain for public use, the scaling up taking center stage at the Most technical discussions, many think that the relief will not take long.

Want to know more? Visit the complete set of guides – Blockchain 101 & # 39; from CoinDesk.

Coins image via Shutterstock

Leader in blockchain information, CoinDesk is an independent media company that strives to achieve the highest journalistic standards and adheres to a strict set of editorial policies. Do you want to offer your expertise or ideas for our reporting? Contact us at news@coindesk.com.

