New Charges When Paying With Bitcoin

As bitcoin gains popularity as a digital currency, the blockchain undergoes changes to keep up with industry needs and trends. Bitcoin has welcomed soaring values in 2017, which further increased the demand for secure bitcoin transactions. However, the growing demand for bitcoin is raising the price, known as a miner fee, of making transactions. To compensate for this and the rising cost of processing received bitcoin payments, a new change was introduced today that affects how network costs are paid on BitPay invoices.

With each bitcoin transaction, you send funds to a bitcoin wallet address that is controlled by either the BitPay service or another third-party. The Unspent Transaction Output (UTXO) is the unit of bitcoin that can be used in another bitcoin transaction after the recipient gets a payment and then transfers it away. Miner fees must be paid to combine and sweep UTXOs from BitPay’s receiving addresses, which is one of the reasons the network is experiencing increased costs for each received payment. These costs were previously covered by BitPay.

Beginning March 23rd, these costs were automatically added to the total cost of paying an invoice through BitPay. This will result in no change for businesses using BitPay to accept payments. The fee will only affect consumers that pay a BitPay invoice, on which the new network fee will be shown as part of the total amount to be paid. If the fee is higher than a consumer wishes to pay, they can simply allow the invoice to expire without paying it.

Most payments made using BitPay will not be significantly affected by this new network fee. As the BitPay staff continues to find innovative solutions to the problem of rising costs, they recommend using the system for only larger payments because a fee tacked onto smaller payments may render them uneconomical.