Bitcoin Forum

Hi All,

It seems to me that bitcoin will have a problem in becoming mainstream because it will feel more expensive to use than standard fiat.

With a normal Visa or MAstercard, the vendor bears the cost of using that payment method. In some cases they will add a surcharge or have a minimum charge (i.e. eftpos only available for purchases over $10.00) but in many cases, the vendor simply bears it as a cost of doing business and the customer doesn't see that cost. Maybe the total price of the goods or services factors for this cost but the customer won't see it.

In the case of Bitcoin, it seems to me that the transaction fee is always worn by the buyer and that would make it simply feel more expensive.

I understand there are many efforts for transaction fees on bitcoin to be minimised to improve scaling but it doesn't seem practical that transaction fees will ever reach zero. In the current fiat system, you don't have to pay a fee to use it (in most cases), so it means there is a lack of incentive to use bitcoin for everyday transactions.

How do you guys think about this problem?

Cheers

The usability of bitcoin will decide the price. Bitcoin would not just rise.
Bitcoin would rise and fall till it gets the exact level where it can be used as a trad-able currency.

I have just changed the title from "the cost of bitcoin" to "the cost of using bitcoin"

I'm not concerned about the value of bitcoin itself. I'm just looking at the utility of it and where the cost lays in using it to transact.

Once the price of bitcoin stabilises, maybe vendors could make the price for their goods or service inclusive of the bitcoin network transaction fee.

bitcoin has been around for about 9 years now and in all this time except a couple of months (which is less than 5% of its lifetime) the fees have been a couple of US cents.

you don't see the fees you pay with fiat system, that is different. when you purchase with credit cards,... the vendor pays some fees, to cover that expense they add it to the value of their goods they are selling you and you don't see it because it is not a separate thing, it looks like the real value of what you are buying where in fact a part of it is to cover the "fees".

The price for sending has gone up in recent months, but if you look at it as a wire transfer or Western Union fee then it's still cheap. To send 1 Bitcoin worth of USD by Wester Union, you are looking at a $30 fee. As Bitcoin becomes more mainstream, who knows maybe vendors will begin to pay the fee with a reduce rate on the final purchase price. Kind of balance out what they would have paid for a credit card transaction. Only time will tell what will happen.

Perception isn't reality. And once you (or anyone else) really understands Bitcoin, by using it regularly, you'll realize that it's not more expensive. Fiat is more expensive because it's worth less tomorrow than it is today due to inflation. Bitcoin as a currency is deflationary. I want it to be more valuable tomorrow than it is today, it means my spending power just went up.

And if the idea of buying fractions of a bitcoin (because each bitcoin is worth so much) bothers you, consider buying Litecoin...it only costs $70 per coin, and it's still going to be worth more tomorrow than it is today.

There's a reason that Bitcoin is currently divisible to the 100 millionth of a coin, it ensures that it will be easy to spend even when the price of Bitcoin rises. There could be a time when we're talking about buying and spending satoshi and "Bitcoin" is synonymous with having $100k or $1m.

As the price of BTC goes up so does the transaction fee. It should be reduced once Segwit is actually used.

I haven't had enough coffee yet this morning and my mind is on a 3-day whiskey weekend.  Please explain "Bitcoin as a currency is deflationary."  I want to understand everything.  Thank you.

Bitcoin is like gold, so it is store of value. What is more you can pay with it, invest so it is just supreme. Never doubt in bitcoin and you will be rich!

Just think of bitcoin as gold. And luckly you are in the early-mid timing of bitcoin era. I coming future, bitcoin will get more uses and more value. So, now, is still great time to get into!

It's not quite correct to say that BTC is deflationary.  Basically, the supply increases by a fixed amount every block.  That amount begun at 50 BTC per block (a block being mined approximately every ten minutes), and the amount halves every 210,000 blocks (about four years).

Eventually (around 2140) the total supply will have been reached and then you could say Bitcoin is deflationary because there will be a small number of coins that are lost and become inaccessible, pushing down the supply just slightly.  But even while the supply is increasing, it's very different to the modern fiat's system concept of inflation which is for it to happen for as long as possible and pray that people keep taking out loans from banks.
Bitcoin brings financial sovereignty for digital money.  I agree that this may be a problem to the average consumer, but there's no way of fixing the problem without compromising that sovereignty.

People aren't stupid though - it's not like they could never consider the fees from credit cards and other modern payment systems.

Fee bitcoin in coinbase high now, if low they can't confirm but if fee is 0.001 it is very bad to make more payment

The fee of bitcoin is normal, bitcoin was not projected as a payment method to make payments worldwide without paying fees in the first place. Bitcoin is created to make fast payments worldwide without the slightest limitation from anyone. This sentence is enough for me to pay whatever the current fee is as such form of payment without boundaries and without limitation or control from anyone is the most perfect one that exists yet.

Thank you for answering the crux of my question but I'm still not convinced that it won't be a hurdle. Even if the general population agrees that a decentralised global currency like bitcoin is the best system, it would still require a big psychological shift to accept that they will be paying a certain fraction to an unkown third party (miner) on top of the listed price.



As bitcoin is currently in an inflationary stage (and will be for the foreseeable future), I don't accept this as a reason to overlook transaction fees.

I have no problem with owning a fraction of a bitcoin. That's beside the point.

The fact that a bitcoin is divisible to 100 millionth of a coin isn't going to prevent your holding of bitcoin from eroding due to transaction fees.

I'm yet not convinced but I'm willing to hear your other thoughts.
 


I don't think it's productive to assume you just need to hold bitcoin to become rich. I think we should doubt/criticise Bitcoin otherwise, there is no reason for it to develop/improve. It has to compete with other payment systems and if those other systems prove to have better functionality, bitcoin will get dropped and the value will drop too. Being limited in nature alone isn't going to get us anywhere.



Thank you for your thoughts. So, in that case it doesn't sound viable as an everyday payment method. If that's the case, then we're limiting bitcoin to a narrow application. Don't you think?

Just avoid using btc to pay for smaller transactions and just keep it and hold them for long. Maybe an expensive watch or jewelry would be perfect for bitcoin transaction.

Thank you for the explanation!

not sure about the constant level. i think that volatility will be an inalienable attribute of all crypto-currencies for a long time.

With one exception, there are no places I know of in my area where I can even use bitcoin to pay for something.  So, I guess you could say the fees are ZERO.

Bitcoin is good for big transactions. For now, fees are not suitable for small payments.

I think that. Bitcoin will be useful only for big transaction and for me it is good option for this currency