Bitpay Adds Miner Fees To Invoices

Facing record high network transaction fees, Bitpay has announced that it will add a toverfee to each Bitpay invoice, beginning next week. While merchants’ fees will not be affected by this switch, a purchaser paying a Bitpay invoice will see an “automatically-calculated (based on current network toverfee estimates) network cost” shown spil a part of the total amount to be paid, the company explained.

Fresh Fees on Bitpay Invoices

Commencing on March 23, a fresh toverfee will be added to each Bitpay invoice to voorkant the rising transaction costs of the Bitcoin network. Many businesses presently use Bitpay’s invoice service, which is a customizable API-based system capable of creating and sending numerous invoices to customers. It is still free for payees to receive money using the invoice service. However, payers will see the miner fees added to the total amount to be paid.

“Until now Bitpay has covered the network costs for combining and sweeping UTXOs [Unspent Transaction Output Set] from Bitpay invoice payments”, the company exposed.

Recently, Bitpay CEO Stephen Pair spoke about the Bitcoin network’s mining fees rising “exponentially”. He said that the fees that Bitpay covered for customers ter February crossed the $50,000 mark, prompting the company to raise the ondergrens invoice amount from $0.04 to $1. With this latest announcement, Bitpay stated that:

Ter order for us to proceed processing secure, on-chain bitcoin payments without incurring losses spil UTXO consolidation costs increase, spil of March 23rd wij will now be automatically adding this network cost to the total cost of paying a Bitpay invoice.

UTXO-Based Network Miner Fees

“The miner fees paid to combine and sweep UTXO’s from Bitpay’s receiving addresses are a major part of Bitpay’s enlargened network costs”, the company described. Instead of simply passing along the payments’ network miner toverfee, Bitpay has determined to charge fees based on the number of UTXOs which a payment is sent from.

Each UTXO points to a single Bitcoin address that a wallet could choose to send bitcoins from. It is also the part of a Bitcoin transaction that tells the network how much unspent money is at each sending address.

Wallets commonly have dozens of addresses that make up part of each payment sent. A typical spend from most wallets can stack many addresses together to total up the amount being sent. A payment might only have one UTXO or it could have hundreds of thesis addresses. Bitpay’s invoices will be charging for each one individually. Thesis fees are added to the invoice on top of the payer’s own miner toverfee which originates ter the payer’s wallet, providing Bitpay no control overheen them. The company admitted:

Wij realize that for many users, this network cost may make smaller payments uneconomical.

How to Minimize Fees

For users who are worried about extra network costs on their Bitpay payments, the company said that they “strongly recommend making Bitcoin purchases ter larger increments to offset the cost across a larger payment value”. Te addition, Bitpay also suggested that, to avoid double-paying the network fees, “be sure to pay the precies BTC amount requested on the Bitpay invoice”. Te addition, the company noted that: “A good way to ensure that you do not overpay or underpay a Bitpay invoice is to scan the QR code or pay with a payment-protocol compatible wallet like the Bitpay wallet app”.

Bitpay concluded that “This network cost will not have a significant effect on the majority of payments made through Bitpay”. While purchasers will see the added toverfee, “our merchants’ fees and pricing will not be affected by this change”, the company reiterated.

What do you think of Bitpay’s budge to add miner fees to their invoices? Let us know te the comments section below.

Pics courtesy of Shutterstock and Bitpay

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