Bitcoin users were able to save half a billion USD in fees - Report

Bitcoin users were able to save half a billion USD in fees - Report

By stvleong | Steven Leong | 12 Jun 2020


You will pay network fees, but what if you don't have to pay too much? According to the Bitcoin startup Veriphi Bitcoin (BTC) users could have saved about half a billion USD in network fees if they had fully SegWit and batching adoption.

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According to Veriphi's most recent report, close to half a million transaction blocks were "examined" in order to calculate how much BTC and megabytes would have been saved with these technologies.

As an optional protocol update to blockchain networks, first enabled in 2017, SegWit (Segregated Witness) essentially means a "split transaction signature." It is useful for costs, speed, and scalability. As regards the scaling strategy called batching, it means that there are more than three outputs in a transaction such that two separate parties make a payment concurrently.

The report explains that BTC 205,941 had been paid by miners in seven years, from January 2012 to March 2020 – that could have been batched. This amounts to more than USD 2 billion at the current BTC level.

Over BTC 20,620 Bitcoin users could have saved it if they all used Transaction Batching, the study states. Rather than the BTC 205,941, users paid BTC 185,321 in payments, which save 10%. The (not)saved amount of BTC is now worth USD 202 million through batching.

It's not the end of the awesome sums that could stay in the wallets of the users. According to the report, more than BTC 35,068 could have been saved if all users had used SegWit. Fees will have been BTC 56,142, which is down from BTC 91,210 charged in fees usually – making it 38% savings. The amount of BTC (not)saved by SegWit currently amounts to USD 344 million.

Together, the saved amount at the time of the study was almost half a billion, but it is more than that by today's rates.

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The report recommends that market players such as exchanges consider implementing these technologies. "Bitcoin users must recognize that bitcoin transaction fees will continue to increase and thus prepare before future price appreciation and higher transaction activity is achieved."

Room for saving fees
SegWit's use today is around 50% and several exchanges have taken up payment batching, says the study.

It cites the study by co-founder Nic Carter and analyst Hasu, which accounted for c batching from November 2017 to May 2018. 12% of transactions, 40% of outputs and 30% -60% of the transactions transacted by the Network. Veriphy has found it dropped to 10% at the end of 2018, then rose to 17% in March 2019, and to 30% in August 2019. Since October 2019, it's back to 10% -12%.

By March 2018, the highest adoption of SegWit was 20%. It slowly increased to a range of 30 to 45% and stayed there for more than a year. It jumped to 50% -60 percent in September 2019 until March 2020, when it dropped to 40% -50%.

BTC is currently trading in USD 9,734 at the time of writing (13:09). In the past 24 hours and last week, it's almost unchanged.

 

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stvleong
stvleong

I'm a Digital Marketing Lead | Crypto Trader | Affiliate Marketer and love to write posts related to crypto and anything that is interesting.


Steven Leong
Steven Leong

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