Our bitcoin processor Bitpay announced new fees recently that have significantly increased the cost when making a purchase with bitcoin.
The fees are to cover mining costs, which up until this month, Bitpay has covered. However due to dramatic increase in cost over the last year as shown by the below graph, they're no longer covering these fees.
As you can see in Jan 2016, the fees were about $2 million/month, now they're about $50 million/month. Because of this, Bitpay has passed the fee onto the customer, charging a network/mining fee which can be quite large.
Example Transactions:
$8 - $1.32 fee (16.%)
$4 - $2.15 fee (54%)
$10 - $1.92 fee (19%)
$77 - $4.13 fee (5.4%)
$50 - $7.71 fee (15.5%)
These fees are insanely high and I don't understand yet how they're being calculated. I've contacted Bitpay to get more information about how the fees are being calculated and if there's anything we can do to lower them. I'm also looking into other Bitcoin processors to see if this is something the industry is dealing with or something specific to Bitpay, so moving to another bitcoin processor might be a possibility also.
I'll update here once I have more info.
Update: I just realized I never update this. Bitcoin stated there's nothing they can do about the fees. Basically the use of Bitcoin worldwide is increasing dramatically faster then Bitcoin miners are increasing. Until this supply and demand evens out, fees will be high.
The fees are to cover mining costs, which up until this month, Bitpay has covered. However due to dramatic increase in cost over the last year as shown by the below graph, they're no longer covering these fees.
As you can see in Jan 2016, the fees were about $2 million/month, now they're about $50 million/month. Because of this, Bitpay has passed the fee onto the customer, charging a network/mining fee which can be quite large.
Example Transactions:
$8 - $1.32 fee (16.%)
$4 - $2.15 fee (54%)
$10 - $1.92 fee (19%)
$77 - $4.13 fee (5.4%)
$50 - $7.71 fee (15.5%)
These fees are insanely high and I don't understand yet how they're being calculated. I've contacted Bitpay to get more information about how the fees are being calculated and if there's anything we can do to lower them. I'm also looking into other Bitcoin processors to see if this is something the industry is dealing with or something specific to Bitpay, so moving to another bitcoin processor might be a possibility also.
I'll update here once I have more info.
Update: I just realized I never update this. Bitcoin stated there's nothing they can do about the fees. Basically the use of Bitcoin worldwide is increasing dramatically faster then Bitcoin miners are increasing. Until this supply and demand evens out, fees will be high.
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