Do. Sep 24th, 2020

One of the great virtues of the Bitcoin Blockchain is its decentralized operation. That includes, of course, the commissions we have to pay to make transactions with BTC. These can be defined by us before sending the money. However, a recent study by 0xb10c, the pseudonym of a respected Blockchain engineer. It seems to indicate that BitMEX makes transactions with Bitcoin more expensive.

How does the Bitcoin Blockchain work?

When we need to make a transfer using Fiat money on a daily basis, our bank charges us a commission for the operation. Normally, we don’t even realize the size of this commission, which is automatically charged from our bank account. We do not have any power to decide how much money we want to pay for the service provided by the bank.

In the case of Bitcoin the situation is similar, but with a big difference. Well, just as with traditional Fiat money there are banks that serve as intermediaries in the transactions. In the Bitcoin Blockchain there are miners, who maintain the BTC platform with their computing power. Allowing our operations to be executed.

In exchange for this work, the miners receive two rewards. On the one hand, for every block mined in the Blockchain, the miners receive a certain amount of Bitcoin in return. Which is reduced by half every four years, after every Halving.

On the other hand, users pay a commission to the miners for their work. The amount of the commission is defined by the user who makes the transaction. The higher the commission, the faster your operation Bitcoin Machine – The News Spy – Crypto Investor – Bitcoin Investor – Bitcoin Era will be executed.

How does BitMEX influence this?

However, although each user can define how much money he wants to pay the miners for their work. The truth is that most of the large wallets have an algorithm through which they recommend the user the ideal commission amount he should pay, so that his transaction is executed quickly.

The algorithm is calculated from the average number of transactions in progress and commissions recently paid in the Bitcoin Blockchain. That’s why when one of the largest exchanges in the world, BitMEX, decides to execute its users‘ withdrawals daily at the same time. This puts a lot of pressure on the wallet algorithm. It starts recommending higher commissions to its users.

Thus, according to the 0x10bc research, every day at 1:00 p.m. UTC, BitMEX performs an average of 2,209 transactions in the Bitcoin chain, with a total of 3.16 MB and a total commission payment of 0.95 BTC. This leads to an increase in commissions paid by users between 1:00 p.m. and 9:00 p.m. Generating an additional cost of 1.96 BTC for the crypto community, every day, due to BitMEX payments.

On its part, BitMEX explains that it makes all payments at the same time, to allow each one to be verified manually. This guarantees a high quality in the exchange service, and generates more confidence in its users. Even if this means that on the whole, crypto users pay more for transactions.

Von Liam