Transaction fees change the culture of bitcoin, study says

Bitcoin transaction fees – financial rewards for adding certain records to a blockchain ahead of others – keep the cryptocurrency functioning, but may threaten its long-term viability and contribute to its energy waste, according to a first-of-its-kind study from Cornell researchers.

As bitcoin has grown over the past 10 years, users must wait longer for their transactions to be added to the blockchain – a constantly updated list of records distributed among a network of computers. This lag spurred the emergence of fees, which users pay to move to the head of the line.

“Bitcoin now works essentially how markets work, because if you want something to happen faster, you have to pay for it,” said Maureen O’Hara, the Robert W. Purcell Professor of Finance and professor of economics in the Samuel Curtis Johnson Graduate School of Management and senior author of “From Mining to Markets: The Evolution of Bitcoin Transaction Fees,” which published in October…