Maybe I'm naive, but with all these noobs and old-timers alike whining about transaction fees, I worked out some back of the envelope calculations:
The Bitcoin network is consuming about 100 million kWh to process nearly 400,000 transactions per day. That works out to about 250 kWh per transaction, or about a week of modest home consumption, or enough to power 8 typical US households for a day.
The average cost of electricity in the US is 12 cents per kWh which works out to $30 per transaction or 0.0015 BTC at $20k. This is the break-even transaction fee in terms of energy usage. Any less, you're getting a deal and should be happy to wait for confirmation, any more and hopefully your premium speeds things up.
I personally think $30 is a fair price to securely move any amount of BTC to anyone in the world in typically less than an hour, until either electricity costs come down or the network becomes more energy efficient as demand and use dictate. It's way cheaper and more convenient than a wire. And wires are never intended for small amounts. They're for heavy lifting and high priority transfers. Just try and think about trying to send someone several kilos of gold for $30. For better or for worse, BTC has or will become the favored child of savvy millionaires, governments, and institutions to store (HODL!1) and transmit increasingly vast sums of wealth, sans regulation or too much oversight for the time being.
Besides, there already exists a cheaper and more energy efficient way to send crypto: it’s called Litecoin, et al. You want a cheaper transaction fee, switch to a cheaper coin. It’s less than 50 cents to send Litecoin and your transaction is confirmed way faster. Save your BTC transaction fees for heavy lifting. All these arguments about trying to achieve Visa's daily transaction capacity - why? We already have Visa. Do people really need to securely and irrevocably purchase coffee on the world's first and most desirous blockchain? BTC serves a way different purpose than Visa, and I'm happy having both for the time being. Soon enough there will be Xapo, Revolut, and Square charge card options that will work out a cheap way to transact off-chain and settle on-chain once a month or year or whatever floats your boat.
To me, the analogy between to gold, silver, copper seems apt for various crypto. The abundance, demand, difficulty and cost of extraction and delivery costs get factored into each crypto's price. But BTC still has some tricks up its sleeve, like LN and atomic swaps and other inevitable network improvements clever people will eventually figure out. The future crypto ecosystem looks bright to me. And hopefully the carbon footprint will improve as energy sources and blockchain efficiencies shift into the future.
The Bitcoin network is consuming about 100 million kWh to process nearly 400,000 transactions per day. That works out to about 250 kWh per transaction, or about a week of modest home consumption, or enough to power 8 typical US households for a day.
The average cost of electricity in the US is 12 cents per kWh which works out to $30 per transaction or 0.0015 BTC at $20k. This is the break-even transaction fee in terms of energy usage. Any less, you're getting a deal and should be happy to wait for confirmation, any more and hopefully your premium speeds things up.
I personally think $30 is a fair price to securely move any amount of BTC to anyone in the world in typically less than an hour, until either electricity costs come down or the network becomes more energy efficient as demand and use dictate. It's way cheaper and more convenient than a wire. And wires are never intended for small amounts. They're for heavy lifting and high priority transfers. Just try and think about trying to send someone several kilos of gold for $30. For better or for worse, BTC has or will become the favored child of savvy millionaires, governments, and institutions to store (HODL!1) and transmit increasingly vast sums of wealth, sans regulation or too much oversight for the time being.
Besides, there already exists a cheaper and more energy efficient way to send crypto: it’s called Litecoin, et al. You want a cheaper transaction fee, switch to a cheaper coin. It’s less than 50 cents to send Litecoin and your transaction is confirmed way faster. Save your BTC transaction fees for heavy lifting. All these arguments about trying to achieve Visa's daily transaction capacity - why? We already have Visa. Do people really need to securely and irrevocably purchase coffee on the world's first and most desirous blockchain? BTC serves a way different purpose than Visa, and I'm happy having both for the time being. Soon enough there will be Xapo, Revolut, and Square charge card options that will work out a cheap way to transact off-chain and settle on-chain once a month or year or whatever floats your boat.
To me, the analogy between to gold, silver, copper seems apt for various crypto. The abundance, demand, difficulty and cost of extraction and delivery costs get factored into each crypto's price. But BTC still has some tricks up its sleeve, like LN and atomic swaps and other inevitable network improvements clever people will eventually figure out. The future crypto ecosystem looks bright to me. And hopefully the carbon footprint will improve as energy sources and blockchain efficiencies shift into the future.
Thanks for the really fine thoughts! Cheers!





