Bitcoin Forum

I'm getting a fee is required message when sending a 0.01 bitcoins or even 1.00 bitcoins. Why is that? Where are the rules exactly?

I think the next Bitcoin client will lower the fees to 0.005.

I have another question relating to fees. Who will benefit from the fees ? the miners ?

In bitcoin 0.4.0, the minimum fee (for transactions that require one, per default policy) will be lowered to 0.0005.

Yes, fees go to the miner who puts your transaction into the block chain.

It's not easy to make up general rules to tell if a transaction will need fee or not before issuing it to the client, but it has to do with

• transaction complexity (that is, from how many addresses you are withdrawing founds).
• total amount transferred.
• time (intended as number of blocks added to the chain) since you received those coins

The more complexity, the less amount and the less time, the more likely you are to get that warning.

When you send bitcoins you have to "exercise" a previous transaction output in its entirety.  This means that if you want to send somebody less coins than the transaction output, you have to send the extra coins to a new address which you own.

For example this transaction http://blockexplorer.com/tx/fe9e30d43ed35f24dd909b3d719f0ec29a3f0171b35974fa1594645d1a41424d is either somebody sending 0.01 coins to 19QQ... or somebody sending 0.04 coins to 19uX... and the person who owns 1FoD... owns one of the output addresses.

From the perspective of the network the transaction looks the same (regardless of which address 1FoD... owns) so it has to charge a fee on the transaction. (Not this transaction but other transactions where an output is less than a cent.)

The next version is smarter about choosing the input transaction to avoid this fee.

Cool, it's weird that the fee is so "random" right now. And 0.01 is quite a lot now, in USD and to a miner with a small CPU.