Charlie Lee blames Coinbase for high fees on BTC network

05 Jun, 2019
by David Borman
Charlie Lee blames Coinbase for high fees on BTC network

It is being reported by AMBCrypto that recently Charlie Lee appeared in an interview in which he commented on the differences between Bitcoin and his own creation, Litecoin. At one point, Lee seems to imply that part of the reason for the high fees seen on the Bitcoin network is because Coinbase overcharges users with its own fees, and this in turn "pushes" the higher cost across the network.

The interview is quite long and covers Lee's vision for the future of Litecoin. He makes the common comparison that Bitcoin is a better store of value and Litecoin, being faster with lower fees, is more for daily transactions. At one point Lee admits:

"Litecoin is less decentralized and less secure than Bitcoin, but it optimizes for faster transactions, lower fees, and more bandwidth. This feature made us target the micro-transaction space."

When discussing why Bitcoin is known for such high transaction fees, sometimes becoming prohibitive to being used for payments, Lee puts at least some of the blame on big companies such as Coinbase, where Lee himself used to work:

"Companies like Coinbase are at fault for overcharging users under the pretext of earning huge profits from Bitcoin trading. Such practices pushes the fee throughout the market."

The implication here is that Coinbase overcharges users on its site, and these premiums then get factored in to future transactions, causing an effect throughout the network.

While he does not elaborate on the mechanism, the basic economic logic makes sense.

Is it likely we will ever see these fees reduced on major exchanges? Or will more users flock to cryptocurrencies with lower/no fees? Stick with Chepicap for all updates!

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