Coinbase Rolls Out System to Addressing Bitcoin Payments
With transaction fees “volatile and unpredictable,” sending cryptocurrencies can sometimes be frustrating.
So says U.S.-based crypto exchange Coinbase in a new blog post that sets out the issues rising from shifting miner fees, and exactly what it has been doing to address the problem.
As most who have sent or received bitcoin will know, the primary problem is that the fee variations can mean significant changes in the amount of time it takes for transactions to be confirmed. Coinbase says this wastes company time in pointless support requests and provides users with a “frustrating experience.”
The reason fees rise and fall so readily is that rather than clawing back transaction costs via a percentage – as card firms like Visa and Mastercard do – bitcoin and other cryptocurrencies pay miners a fee to confirm transactions. And that’s based on a model not dissimilar to bidding at an auction.
At times when the bitcoin network is busiest, miners have a queue of transactions to process and these are prioritized by dealing with the transactions offering the highest fee first.
But the method can cause lengthy delays before transactions are confirmed and the funds have “arrived.” It can also cause spiking fees…