For all the gyrations Bitcoin and its enthusiasts have experienced over the past 12 months, the digital currency has managed to trace a relatively calm track lately. It remains, however, an acquired taste for users, and while some independent sales organizations have begun efforts in recent weeks to sell it to merchants, the cryptocurrency’s acceptance online and at the point of sale remains quite limited.
At about $6,400, Bitcoin’s price at mid-morning Thursday, the currency was fetching a price within the $6,000-to-$$8,000 band it has observed since its brief spike into $9,000 territory in early May. The price is also up nicely from the mid-$4,000s the coin traded at a year ago. But, of course, in the meantime came the nosebleed climb to near $20,000 in December and the subsequent plummet to current levels, a roller-coaster ride that convinced many merchants the currency is far too volatile for trade.
Another stumbling block has been the cost of getting transactions entered into the blockchain. This fee, which users pay when they spend Bitcoin, has calmed down considerably after reaching unheard-of heights nine months ago. The median fee stood at 30 cents per transaction Thursday, according to Bitinfocharts, which tracks prices and fees for cryptocurrency.
That’s within the fairly narrow band the fee has traced since February, with brief mini-spikes in April, May, and June. That last one saw the price climb to better than $2. Still, current fees are nothing compared to the record $34 per transaction the coin soared to two days before Christmas.
While still exhibiting some volatility, transaction fees for Bitcoin may now give enthusiasts some breathing room to seek out wider acceptance. Fees are paid by users, not merchants, but online and physical stores have been put off by the volatility in cost.
Another challenge has been lengthy confirmation times for transactions that are supposed to settle in the blink of an eye. The longer merchants and consumers have to wait, the greater the chance a higher or lower price will suddenly require a second transaction, at yet another fee. The problem is blamed on network congestion, which crypto experts are working to correct with measures including largely off-chain processing. But volatility in both price and fees has soured even merchants that were early adopters, including online travel site Expedia.