The Bitcoin network is currently experiencing a period of rapid growth. This is an exciting time to be in Bitcoin, and we’re seeing all-time highs in bitcoin transactions processed through BitPay. However, we are also seeing rising miner fees for transactions across the bitcoin network. That’s why (effective tomorrow) we’re raising the BitPay minimum invoice amount from $ 0.04 to $ 1.
Some Background on the Bitcoin Network
For those unfamiliar with how the Bitcoin network operates, transactions are funded with a bitcoin miner transaction fee. The size of this fee determines the priority given to transactions for confirmation on Bitcoin’s distributed network.
While transactions on the Bitcoin network are increasing, the current limit on transactions that can be processed in each block (group of transactions) on the network has remained the same. The network capacity will likely remain the same for the foreseeable future. Fees have increased to bid for the limited supply of space. Now that fees are reaching an average of $ 1 per transaction across the Bitcoin network, it’s becoming uneconomical for users to make micropayments under $ 1.
It’s also becoming increasingly expensive for BitPay to send these transactions to our exchange partners and merchants.
Our New Invoice Minimum
We’re responding to the increasing cost of miner fees by raising the minimum for BitPay invoice creation to $ 1.00, effective tomorrow (March 9th). This change will protect consumers from creating un-economical transactions and remove our own risk for processing unprofitable transactions.
Merchants who wish to test BitPay’s payment system with smaller amounts can continue to create low-value invoices under $ 1.00 using BitPay’s fully functioning testnet environment. For individuals testing transactions, the BitPay wallet app includes a testnet wallet setting as well. Since testnet payments rely on bitcoin addresses from the Bitcoin testnet, they are not subject to the same confirmation times and fee levels as the Bitcoin livenet.
Our CEO Stephen Pair gave more background on the current situation with bitcoin network miner fees in our recent article “The Bitcoin Fee Market.”