Better fee estimation and fee/tx/mempool management in wallets

Question

Right now mempool has 65 MB of transactions waiting for miners to be included in blocks. 90% of the transactions are below 10 sat/vbyte.

I am observing this trend from last few days and think it will settle once we have couple of days with less people looking to use higher fee rate for quick confirmations. It can take few days to weeks. Is there a better way for wallets to manage transactions and fees so that people realize that they are paying more than 10x fees. Its difficult to educate everyone about using different tools and websites, not easy to convince exchanges to use segwit, rbf, maybe even cpfp, batching, LN, Liquid etc. and I think we can manage mempool and fees in a better way if most of the wallets experiment with solutions to solve this problem.

How can we solve this problem?

Answer 1

You are right, after about three years, we only achieved about 11% of native segwit usage, ~ 1000 BTC locked in public lightning channels, RBF/CPFP usage is about 15%/10%.

Unfortunately, most people don't care much whether they pay $0.02 or $0.2 in fees. They only start caring when fees are much higher than that. Since January 2018, we have only had that at a much lower level in April-June 2019 and at the end of October/start of November 2020. Which allows most users to just wait for the congestion period to resolve. In order to have a real change, I think we will need a real congestion period the likes of those in 2017 or even worse.

I am creating a service that will make it easy for wallets/custodians to optimize the fee of their transactions. The way it works is that users relay RBF pre-signed transactions that pay for different fees. The service then optimizes the fee by smartly broadcasting these transactions. It's already live, in beta: https://bitpost.co Anyone can try it out by following this tutorial: https://docs.bitpost.co/basic/quick-start There is a testnet version of the service too.