Bitcoiners are paying higher transaction fees than needed, analyst says
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Bitcoiners are paying higher transaction fees than needed, analyst says

Saudu Clement
Saudu Clement

According to Mark Erhardt of Chaincode Labs, 88% of all Bitcoin transaction fees are higher than necessary. His assertion is based on data that reveals that only 12% of Bitcoin transaction inputs use SegWit.

For the uninitiated, SegWit, otherwise known as Segregated Witness is a space-saving transaction format, which is meant to increase the block size limit on the Bitcoin blockchain. It was first introduced by a Bitcoin developer and the co-founder of Blockstream in 2015. However, it was finally activated on August 23, 2017.

Three and a half years later and its implementation is still alien to a lot of users. The analyst believes an over-reliance on legacy transaction fees is contributing to the backlog of unconfirmed Bitcoin transactions. As of press time, Bitcoin mempool had over 104,000 pending transactions with fees in excess of 13 BTC.

Erhardt believes that the easiest way to bring down fees is to adopt SegWit for all future transactions. He said:

The longer less efficient output formats are prevalent, the more future blockspace debt we accumulate... At what point is it acceptable to consider wallets that cannot send to native SegWit addresses outdated?

Erhardt is looking to a time in Bitcoin history when major wallet services will integrate SegWit.