1/ Why do we need transaction fees in Bitcoin?
>Reward for miners adding transactions to the Timechain.
>Incentive for decentralization and network security.
>Prevents spam and malicious use.
>Manages network congestion efficiently.
2/ Why are Bitcoin fees high now?
The rise in fees is linked to the surge in NFT activity. Demand for "digital art" on Bitcoin is causing fee spikes.
3/ How to manage fees with Hodl Hodl?
Users can set custom fee rates on Hodl Hodl.
Understand implications - low fees may result in delayed transactions, high fees may eat into your Bitcoin purchase. Hodl Hodl offers high, medium, or low fee options based on network conditions.
4/ Considerations for fee management:
Mempool calculates fees in sat/vB, Hodl Hodl estimates cost as sat/vB multiplied by transaction size. Precise fee rate estimations are still challenging due to miner variations and unpredictable block timings.
5/ Parting thoughts on Bitcoin fees:
Discussions about fees and solutions are cyclical.
Previous spikes led to Lightning network adoption and emphasized the need for understanding coin management. High fees foster efficient block space use, creating a cycle of fee dynamics in the Bitcoin network.
Learn more in our latest blog post > https://hodlhodl.medium.com/bitcoin-mining-fees-b1b9f75a227c