Unconfirmed transactions are the result of a not-so-tasty recipe. The Bitcoin value has raised to unprecedented levels. This has brought the fees for an average transaction to soar to around the cost of a coffee. Furthermore the number of transactions is also touching the theoretical and practical limit of 7 transactions per second. All kind of problems can stem from this situation.
Living in uncertainty
In my opinion the most valuable indicator to have a pulse of Bitcoin is the number of unconfirmed transactions. Currently we are well above above 20k: Live Number of Unconfirmed Transactions. This means thousands of bitcoins are now in a limbo.
You can imagine sending a sizeable amount of money and paying also a hefty fee. People won’t be sure that the money is going to get to destination eventually. You are obviously scared of sending the transaction twice because the first one might not expire. In general most users, while willing to pay the fees, are not going to set them manually to make sure urgent transactions are delivered fast.
Having a payment medium which costs potentially a lot and doesn’t guarantee that your payment will be registered is not very good. The only way to be sure to actually send money at this point is to lure the miners with a much higher fee than average. We are talking around 5 to 6 euros at writing time.
Solutions and Alternative Views
There are plenty of crypto coins on the market with similar or better characteristics than Bitcoin. So it’s more likely that normal end user switch to a lighter blockchain that can actually support a higher number of transactions.
Obviously the developers of Bitcoin and miners alike are thinking of a solution to this but surprisingly the price of Bitcoin is not going down. What could this mean?
If this were to continue there is only a scope Bitcoin could fit well actually. We could imagine Bitcoin as a clearing house akin to NASDAQ. You only move actual money once a day and if there is enough volume to actually justify the transaction. With this in mind the transaction fees become negligible.
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