That used to be my rally cry when preaching the bitcoin gospel to anyone willing to listen. To be honest I told a fair amount of people that had no interest in listening too. Not ideal for someone like me who pays my barber in bitcoin.
How did we blockchain info wallet fees swallows here? Why are transaction fees so high? To understand that you need to go under the hood and examine some Bitcoin fundamentals. Alice wants to send 0.
Alice opens up her wallet, selects Bob as the recipient, and presses send. When this happens the transaction is broadcast throughout the Bitcoin network. A transaction is not finalized until it has been confirmed. Best practice is to wait for a few confirmations before you consider yourself the owner of the bitcoins you have received.
Approximately every 10 minutes a confirmation takes place on the Bitcoin network. Why are confirmations important? Because confirmations are what secures Bitcoin!
Instead of trusting blockchain info wallet fees swallows third party such as Paypal, Venmo, or your bank to validate the account ledger Bitcoin blockchain info wallet fees swallows mathematics.
Bitcoin is the first technology to solve the double-spend problem. How can we be sure that Alice does not send the same bitcoin she sent Bob back to herself? Confirmations happen through a process called mining. Mining serves a few purposes on the bitcoin network, but in this example we will focus only on confirmations. The bitcoin mining process uses computer hardware and electricity to solve complex math problems.
Transactions are broadcasts out to all nodes on the network. When the nodes also known as miners receive the transaction they bundle those transactions into a block and begin working to solve the mathematical problem. How would you begin? You get the idea. Miners are competing against each other solve the lock and the first to solve the problem creates a block containing all of transactions they recently received. The process takes approximately 10 minutes.
I will not bore you today with cryptography, but this technology is used to secure Internet. If Alice tries to send the bitcoin she sent to Bob back to herself after it has been confirmed the network nodes miners will look at the blockchain history and see that the transaction is invalid. What happens if Alice sends out two transactions to the network: This is where things get interesting.
Miners do not process transactions on a first come first serve basis. If Alice sends Bob 0. It might take months or never get confirmed at all. There are a few other attack vectors, but this is why a recipient must wait for a few confirmations.
Now you have a general understanding how bitcoin transactions are processed. Bitcoin has not scaled at the pace needed. There are simply too many transactions currently happening on the network right now to keep up. Supply and demand are at work here. If you need a transaction to go through quickly a higher fee is required. The transactions with highest fees get priority. Does this mean Bitcoin is only destined for rich people moving massive amounts of money?
Fortunately the fabulous bitcoin development community is hard at work on a fix. The lightning network is an extremely exciting bolt on to Bitcoin. It improves upon the existing infrastructure by providing instant payments, low cost, and scales the network. Waiting for confirmations will no longer be needed.
On December 25, release candidate one was delivered! Welcome to the show! This surge will come with another correction downward, but when will it happen? Before we get too much further I should let you know I am not a financial adviser blockchain info wallet fees swallows I do not play one on the internet.
Let that sink in. The price did a yo-yo like sprint until November where blockchain info wallet fees swallows took off like a rocket! Another giant order of magnitude jump! With the good comes the bad. A very difficult pill to swallow for individuals who invested in Bitcoin at the peak prices. Think critically before jumping into Bitcoin.
You must be prepared to take a long position and ready to lose everything. Bitcoin and cryptocurrencies are speculative and your average Joe can be extremely emotional with investments. Right now if you can order an Uber you are tech saavy enough to buy and sell Bitcoin. Buying low and selling blockchain info wallet fees swallows is much easier blockchain info wallet fees swallows than done.
If you are thinking about investing into Bitcoin or any cryptocurrency then do your due diligence. Study how Bitcoin functions technically and learn how to store it securely.
Insurance for stolen Bitcoin is a rarity. Learn about the technology behind Bitcoin instead of studying the price. How does a person in Kenya use text message to send money to someone in Canada instantly? Magic internet money you say? Read the Bitcoin white paper. Read it once, take a walk, then read it again with a pencil and paper. Write lots of notes and keep a google page close by. You will blockchain info wallet fees swallows it. It took me over a year to understand and I work in the tech field.
Thankfully there are many Youtube explanations out there. Andreas Antonopoulos is another great resource for providing eloquent and technical information. All his books I highly recommend! Bitcoin can open up a new way of thinking for those interested. You will learn about the economy, decentralized networks, cryptography, and game theory. Now that you have done your homework it is time to get some Bitcoin!
A Bitcoin can be broken down eight decimal points. It gets more interesting the more you learn. Usher in the Lightning Network! It will not happen overnight, but there is light ning at the end of the tunnel. Please leave a comment below.
Bitcoin memes on Instagram? Tickers tracking the price on CNBC? Understanding the price in relation to Bitcoin as a unit is important! Thanks for reading blockchain info wallet fees swallows please leave a comment below.
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