high commissions in the bitcoin network do not threaten on-chain businesses

Can_high_comissions_in_the_bitcoin_network hurt_on-chain_businesses_Mixer.money
Can_high_comissions_in_the_bitcoin_network hurt_on-chain_businesses_Mixer.money

The buzz around BRC-20 tokens in May 2023 led to a meteoric rise in fees on the bitcoin network, with miner transaction revenues up 270% in the second quarter compared to the previous period.

Against this backdrop, the capacity of the Lightning Network (LN) micropayment network exceeded $172 million. However, representatives of the Bitcoin mixer Mixer.money do not expect a massive transition to LN in the foreseeable future.

According to the project team, surges in the cost of commissions in the blockchain of the first cryptocurrency are episodic and short-lived, which means they cannot threaten on-chain businesses:

“High fees certainly hurt the performance of any on-chain service, but our statistics show a slight decrease in user activity within normal weekly fluctuations.

By now, the hype around NFTs and BRC20 tokens has died down: transaction fees are gradually returning to adequate levels.

TOIn addition, we do not know the future of these assets: many members of the community surethat “picture” transactions are cluttering up the bitcoin blockchain.”

Mixer.money believes that the Lightning Network can serve as a temporary alternative during periods of heavy mempool workload. However, to date, only a few exchanges have implemented support for the protocol. Moreover, LN is focused on micropayments and is not suitable for long-term investors:

“Holders are willing to pay for the security offered by the main Bitcoin network. They don’t transact that often, and historically digital gold’s returns cover any transaction fees.

Even at its peak, bitcoin transaction fees are lower than in many payment systems from Tradfi-sectors.

The service calls the migration of users to alternative blockchains unlikely, as Bitcoin remains the main decentralized cryptocurrency with a large number of services.

“High commissions do not threaten on-chain businesses, because their regulation is embedded in the bitcoin protocol itself. With a local surge, the number of new transactions, as a rule, gradually decreases, and the workload of the mempool and the size of commissions return to normal relatively quickly,” Mixer.money analysts say.

They agree that halving will make high fees commonplace on the bitcoin network in the long run. This prediction was given by its creator Satoshi Nakamoto in 2010:

“In a few decades, when the reward becomes too small, the transaction fee will become the main compensation for [майнинговых] node I am sure that in 20 years there will be either a very large volume of transactions, or no volume at all.”

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