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One day all BTC wallets containing less than $100 will have their BTC locked forever

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Avatar for Zek256
Written by   6
2 weeks ago

Recently someone made a post in r/btc asking about a problem he was having: he had $8.50 of BTC in his wallet and he wanted to make an online purchase for a good costing $7, however his wallet was telling him that he had insufficient funds to make the transaction.

According to Billfodl the fees during the time of his posting were around $5.75 which would have only allowed him to send a max of $2.75 if he wanted to have the transaction confirmed in the next 3 blocks.

This situation is the concrete evidence of the things the BCH community has been talking about for a long time. I was transacting BTC with a fee of anywhere from $0.05-0.25 for the previous few months, however now that there is much more activity on the network, things are rapidly changing. They will only progressively get worse as time goes on and as more people attempt to use and adopt BTC. Even with the recent addition of the liquid network Sidechain, people will be unable to peg-in their BTC if the wallet does not have a sufficient amount to cover the transaction fee.

There is an additional choice that the wallet user can make in this situation and that is to manually adjust their fees, however in the hypothetical situation of this lad and his $8.5 in BTC, assuming the median fee is $50, his transaction would be stuck in the mempool for 2 weeks and then dropped out of it.

Assuming BTC adoption continues and the demand for transactions increases, there will be a day when a wallet containing $100 or less will be unable to make a transaction therefore locking the $100 forever or until BTC has negative adoption and the demand to transact decreases, defeating the entire goal of BTC. Even if the only on chain transactions are made by institutions and liquid network Federation members, the fees will still be too high unless they themselves also participate in the negative adoption. So if the liquid network ends up working out in the long term, these sub $100 wallets will be locked forever.

I choose the $100 dollar amount arbitrarily, it could very well be any amount, but $100 dollars in this situation is practical for not being able to pay for the fee in the next few years, maybe even sooner.

If this situation occurs and people want to hold under $100 in their BTC wallet, they will be forced to keep their BTC on the exchange in which it was purchased, thereby forcing the BTC lower class to only use exchanges and BTC banks, where they are forced to surrender their financial independence and sovereignty.

Even if they can physically pay the fee, such as having $200 in a wallet during a period of a $100 median fee, it still is unreasonable and they will be financially incentivized to keep their BTC on an exchange, placing their financial security on the shoulders of the exchange.

This is why small blocks are a huge blow to decentralization and can lock some wallets indefinitely.

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Avatar for Zek256
Written by   6
2 weeks ago
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Comments

Btc might become so expensive that it's use might be limited. Adoption of other crypto will then be the best option at the time

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1 week ago

As the networking chain is getting fussed and btc becoming expensive than other currencies I hope btc countinue to maintain its stand

$ 0.00
1 week ago

It seems to be a reasonable problem. The ETH protocol could be more prepared for this kind of situations.

Regards

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1 week ago

Yes , people around me still use BTC and the fees so high I don't know how they still useing BTC .. It's not getting better soon ..

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2 weeks ago

Well, bitcoin become expensive af. There is only 700k BTC on marketcup. :) Waiting for new posts !

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2 weeks ago

There was also some short of proposal that didn't ever go through about shorter time between blocks. Why wasn't this even discussed?

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2 weeks ago

That would require a hardfork. That would probably lead to the creation of a new coin. This all happened on August 1, 2017 when the block size was increased and Bitcoin Cash was created.

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2 weeks ago

If this should happen it'll be really bad, and if it does so many people will rather want to get other coins

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2 weeks ago

Not to say much. But this day is what all BTC HODL'ers are waiting for. Because at that time, BTCUSD would be exchanging for around 90 to 100k. I don't think that would be bad news for HODL'ers. We pray for more people to adopt.

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2 weeks ago

the problem getting worse day by day..next btc halving might cost a 100$ btc each withdraw...hooray..

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2 weeks ago

Haha probably. Hyper inflation is on the way amid thjsi covis19 crisis. Very interesting

$ 0.00
2 weeks ago

This is a good red flag for everyone who still believe vehemently in Bitcoin to make a paradigm shift to BitcoinCash for better crypto experience.

$ 0.01
2 weeks ago

I agree. Even some one had already predict btc orice about75000 in near future. What will haoen at that time

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2 weeks ago

I really don't think it will rise to those levels. If it does it will be because the coin is closely related to other altcoins.

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1 week ago

Well i dont relay know but i habe head it said by some one who is very fluent about bitcoin. It was his prediction.

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1 week ago

It's a nice article... This information is very important and helpful for people.. Keep it up.. Hope to see your more impressive articles

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2 weeks ago

Cryptocurrency was supposed to make transactions less expensive and easy not expensive

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2 weeks ago

Btc might become so expensive that it's use might be limited. Adoption of other crypto will then be the best option at the time

$ 0.00
2 weeks ago

Now is the best time to adopt other cryptos.

$ 0.01
2 weeks ago

I would recommend something like TEZOS / XTZ which offers Staking. The more you hold the more you can earn, which is a great concept.

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1 week ago

this just 100% true fact

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2 weeks ago

So true. I stopped using BTC after experiencing high transaction fees. I exchanged my BTC for BCH and XRP.

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2 weeks ago

I swapped all my BTCs 2 years ago and did not make any more transactions with them. Since then I have been using BCH and sometimes ETH almost exclusively. In between I have also used some LTC. But 1 year ago I dropped LTC as well.

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2 weeks ago

From @Olad Thank you for upvoting my comment. I appreciate it a lot. It is an encouragement for me to be more active on read.cash. Thanks and stay safe.

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2 weeks ago

I have experienced something of this nature recently both on btc and ethereum. It is not good at all. But I think it will make people to use alt coins more often.

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2 weeks ago

however now that there is much more activity on the network, things are rapidly changing

The activity has not even increased significantly. Only fewer blocks are found because hashrate has fallen due to halving. If the price of BTC should fall, it will be really dramatic. In March there was already a big traffic jam in the mempool because the price fell strongly. BTC is broken and useless.

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2 weeks ago

Nice article. But to be honest this is really bad. Charging a fee that high is really not a good choice. Not everyone can afford upto $100 of btc

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2 weeks ago

Those who use the BTC are themselves to blame. Why use BTC when there is BCH? It works better, transactions are faster, it is often accepted.

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2 weeks ago

Thats true. You have a good point. People should begin to embrace BCH before it will be too late

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2 weeks ago

It's never too late. The problem is, most people don't inform themselves or have a clue. If they have heard of Bitcoin (BTC), they notice the overpriced fees and turn away from crypto currencies. That is a pity. BTC became a cancer for crypto currencies, because the block size was not increased from 1MB to 8MB. Here you can read how it happened https://read.cash/@btcfork/mythbusting-controversial-hard-forks-cannot-happen-2cd44286

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2 weeks ago

Yes some days thia could be possible. Besides hyperinflation is sure to come amids thia covid 19 pandemic

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2 weeks ago