First and foremost, I am not an investor nor speculator in Bitcoins. I am merely a spectator sitting on the sidelines, observing the lunacy that has unfolded over the past few weeks in cryptocurrencies. I have no bias, bull or bear, but am interested in this space due to my involvement in the underlying blockchain technology.
The fundamental premise of using the blockchain in the beginning, was to create a system that would bypass 3rd parties such as banks, who were unreliable, and provide users the free transfer of funds to one another. Although that was the sale pitch, I'm sure all users of the blockchain will agree that using the blockchain is not completely free. This is not a bad thing at all, since there is a lot more upside to using a blockchain. The cost was intended to be minimal, but not exactly free.
Routing transactions through the bitcoin blockchain is fast and secure through the use of cryptography. To make that possible, massive computing power is required, which is borrowed from a source somewhere in the world, and is in return compensated in bitcoins as an economical incentive of sorts. At the end of the day, that's what motivates us all to do anything, isn't it?
Now, people reading this most likely are involved in some way or form with Bitcoins or the blockchain, and I assume understand all of that, and more. Here's what's been puzzling to me recently. Have a gander:
The above chart is the 12 month chart of the average Bitcoin transaction fee taken from a public source, in other words, it is the cost of interacting with the Bitcoin blockchain. Last week, we hit a high of $55+.
At some point, users of the Bitcoin blockchain, or any public blockchain for that matter, are going to get discouraged to use it as the value of the crypto gets so expensive it is no longer economically feasible. Granted, owners of the coin have unabated interest in seeing the coin value go higher, in perpetuity, without pause. However, the interests are no longer aligned with users of the blockchain, as the users are stuck paying egregious transaction fees due to increase in Bitcoin value, and would rather see some stability in coin prices than unfettered appreciation.
Perhaps I'm crazy, but is this not an issue to anybody else? Thoughts?
Again, my intention was not to shit on Bitcoin buyers. I have no position in Bitcoin, but certainly would not be buying it at these prices.