Bitcoin Forum

Hi Guys,

maybe someone can help me understand because I'm having really hard time and I'm sure there are very good reasons!

What's the purpose of letting the transaction pool to get so full to have transactions falling out of the pool, having the fees so high that we have a limit on the minimum transaction and some exchanges stopping the withdrawals because of the network congestion?

While for someone transferring 100k might be acceptable to pay a $60 fee to see their transaction approved there are so many people that would love to be able to invest $100 or $200 which in many countries might be more than a monthly salary or their life savings.

Reading the whitepaper I read:

To the states of art bitcoin is not this anymore, it doesn't allow online payments (unless you are buying a lambo but I doubt bitcoin purpose is to buy lambos) and since a transaction with a low fee can fall off the pool the double spending is more than a reality.

Am I reading the wrong whitepaper? if not what's the reason for letting bitcoin get so distant from the whitepaper? What can we do to have it back on track?

There is no purpose for any of this! None of this is ideal! The problem is a decentralized group of developers not willing to agree on a single direction. That's why we've seen several hard forks, coup attempts, trying to evolve Bitcoin to something better.


Bitcoin hasn't drifted from the whitepaper, it's just matured and grown such that it needs to be updated to evolve with the growing demand.

Nothing is going on with bitcoin per se, what you are witnessing is first hand greed and what happens when a group of people don't agree. It should be no surprise where there are hundreds of millions and billions of dollars there is some form of corruption. I wish we could live in a utopia that didn't do this but this is the way the world is and you would be naive to not expect it especially in this industry.

We can put in different ways, the reality is that as it is right now bitcoin does not respond to the definition in the white paper. In the 1800 a horse was an advanced transportation system, today we can can't call it a transportation system anymore. And we digress about how to say it but the truth is that bitcoin does not have the requirements of the system described in the whitepaper.

The question is what can we do to hold those people accountable? Right now looks like the problem is evident and to me il looks like a bunch of kids are infesting twitter and reddit just trolling and harrassing people around instead of trying to solve the problem, and it looks like those trolls are in charge of what should be what is the revolution of our times. I think Bitcoin deserves something better, again, what can we do?

I think it's quite clear that bitcoin is becoming increasingly unusable for small value transactions. The reason is well known and widely discussed. I think bitcoin will become store of value with little practical use in daily transaction. Other currencies like bitcoin cash will become true transaction money.   

It's still Bitcoin. It was born with a scaling problem, and it very much hasn't shaken it off. Cut down the number of transactions to manageable levels and it will work exactly like how the whitepaper described. Nothing has changed, and that's exactly the problem. A scaling solution has to be implemented.


This wasn't done intentionally. Bitcoin can only handle a fixed amount of transactions, and we're currently over that. As a result, low fee transactions get stuck in limbo, and users enter a bidding war to have their transactions confirmed as soon as possible.


Segwit was a step in the right direction because it allows the network to handle more transactions, but not everyone is using it. Lightning Network is on the horizon, which allows instant "confirmations" that is envisioned to reduce the fees. Other parties are going in other directions, like Bitcoin Cash whose solution is to continuously increase the blocksize as demand goes up.

That's why they had bitcoincash fork to overcome its problems. But they failed miserably even in that. Even with bitcoin drawbacks its still more than gold to collect it.

Bitcoin is becoming less useful for small investors.Large fees have now deterred many people from investing or using bitcoin. Its a rich mans game.

True enough. It's no longer the go-to platform for everyday payments as fees and confirmation time are both getting really really ridiculous.

Everything that you quoted from the whitepaper is still true.



Yep.  Still peer-to-peer.  Still electronic.  Still cash.


Yep.  Can still send directly from one party to another.


Yep.  Transactions still complete without any need for a financial institution.


Yep.  Still using digital signatures.


Yep.  Still don't need a trusted third party to prevent double-spending.


Yep.  Still using proof-of-work with an ongoing chain to timestamp transactions.


Yep.  Still impossible to change the record without re-doing all the proof-of-work.


Yep.  Still using the longest valid chain.  Longest chain is still proof that it came from the largest pool of hashing power.


Yep. Bitcoin is still vulnerable to a 51% attack, and as long as the majority is not cooperating to
attack the network, Bitcoin is still secure.


Yep, the network is still only minimally structured, and messages are on a best effort basis.


Yep.  My node still leaves and rejoins the network all the time.


Yep.  Longest proof-of-work is still reliable proof of what happened.

FURTHERMORE, YOU FORGOT TO QUOTE THIS PART OF THE WHITEPAPER:


What do you know, the exact thing you are complaining about (transaction fees) are described right there in the whitepaper.

Lets take a look at the rest of your nonsense post:


What transaction pool?  Please show me in the whitepaper where is says anything about a "transaction pool".

Bitcoin doesn't have a "transaction pool".


How exactly are you going to decide what fee I am willing to pay?


That's just a business decision. It has nothing to do with the Bitcoin protocol. Exchanges could just pass the cost of fees on to their users if they want to.


The protocol doesn't set the fees.  The users do.  There is limited space available in a block for transactions.  If someone is willing to pay for the space, they get it.


Of course it is.


It allows online payments to anybody that is willing to pay a competitive price for block space.  That's all it was ever intended to do.


Double spending of a confirmed transaction is an impossibility unless there is a 51% attack.  This has always been true.  This is still true.  If you are choosing to accept unconfirmed transactions, then you are choosing to expose yourself to that risk.  That has always been true.  That is still true.


I get the impression that you are not reading it at all.  You are imagining what you want bitcoin to be for you, and complaining that it isn't living up to your expectations.  Perhaps if you took the time to set your expectations properly (by actually reading the whitepaper), you wouldn't be so disappointed.


Distant in what way?


It is on track.

At this moment it is not suitable for micro transactions anymore, but that doesn't mean it is not what it was meant to be anymore.

If you want a few hundred dollars worth of bitcoin, use altcoins or keep it on exchanges to prevent running into the high fees.

Doesn't this still beat the main purpose of Bitcoin? Also, converting to alts has fees too, right? Some recipients also don't have such alternatives.

I totally agree with what you have said !

We do support bitcoin and it's main purpose but you don't really have a choice. Continuing with the scaling problem will make you lose what could have been your own profit.
Using altcoins could give you cheaper and faster compared to bitcoin today. It's for your own sake too.
Maybe someday when problems are resolved, we may continue with lesser pain. But for now, hundred dollars or less worth of bitcoin transaction is not practical.
Bitcoin is still a good long term storage though. Nice to have some alts used as a helping hand nowadays.

The developers really don't care about what is going on with the high fees and the investors complaining about it at all and they also don't seem to care about people jumping the bandwagon and joining bitcoin cash at all. So it leaves me with a question and that is what do they really care about?

This is the answer that I wish to never have to see ... negletting problems is the worst way to deal with it! do you think it's normal a fee of $60 to transfer $15? Do you think it's sustainable? When you pay with cash you need to pay a 600% fee on the transaction? (or 6000% if I want to buy an icecream?).

Don't ask the questions if you don't want the answers.


You stated a few things that weren't true, and then asked why bitcoin was no longer doing what the whitepaper said.

I pointed out where you were wrong.

That has nothing to do with "negletting problems".


No.  I think you are foolish to spend a $60 fee to transfer $15.

However, I support your right to waste money in that way if you wish to.


Think what is sustainable?

Bitcoin fees are designed to be self-sustaining.

If the fee is too high, then less people will send Bitcoin transactions.  If less people send Bitcoin transactions, then there will be more room in the blockchain at lower fees.  If there is more room in the blockchain at lower fees, then more people will send Bitcoin transactions.  If more people send Bitcoin transactions, then there is less room in the blockchain at lower fees.  These opposing financial incentives force the blocks to fill up with transactions at exactly the fees that are sustainable (because if they are not sustainable, then there will be less transactions and therefore cheaper fees).


I don't buy icecream with Bitcoin.

You are welcome to do so, but that seems like a poor choice of transaction for a system as important, significant, and expensive as Bitcoin.

Evolution is always happening on everything. The whitepaper that you qouted is the defination of what bitcoin should have been but to coup up with the demand and the competition on cryptocurrency, it should somewhat upgrade and find ways to be on top. Right now bitcoin may not be defined as what it was stated in the whitepaper you qouted but it is still the most reliable cryptocurrency.

So it's cash but I can't buy icecreams or even a new iphone would be too expensive to buy since I'm not going to pay a 10% premium to pay it with bitcoin. In Venezuela it would be too expensive to buy a house with bitcoin!  what's your definition of cash?

I don't like him but given this answers Roger Ver is so right in what he says and as much I don't like the project Bitcoin Cash it is much closer to the whitepaper then what Bitcoin Core now is ... there are thousands of people sharing my same concern and instead of receving answer with convincing solution we are considered stupid ... I hope someone else will be able to take on this project

Greed does not cause excessive transaction fees.

The interesting fact of transaction fees is that the people who receive them (the miners) have no control over their amount.

Users (you and I) have demanded fast confirmation times, so the wallet developers have responded, with large suggested transaction fees, based on transaction fees of other unconfirmed transactions.

A small investor can use an exchange. Personally, I have made many small (~$100) purchases using LocalBitcoins.com, leaving my BTC there until I have accumulated enough to justify a transfer to my private wallet.

Fast confirmation time? if I want to transfer $20 what would be your suggested transaction fee to make sure the transaction is actually confirmed? (not fast, I just want to be sure the transaction will occur)

I think what's happening is yet again another complication from our third parties. Yes, i think its better to stick to the white paper.

Yes it's true it's no longer wise when you transact with bitcoin with this very high transaction fees I also try to do it but when I saw the fees higher than my transactions I'd rather keep my coins and till the fees drop. This is one reason why hardfork was introduce because somehow bitcoin is no longer relevant we need something faster and more reliable coin if this scenario continue to happen I will not be surprise everyone will transfer to a much better alts

Apparently the bitcoin developers did not prevent this problem, high rates, perhaps at the time would not believe that bitcoin was going to have great growth in its price, now it has become a currency only to have it retained and not to do Payments.

bitcoin will reach out from small investors soon and bitcoin will be used for big payment.
bcz its fee are so expensive now .but its still early stage if u want to buy bitcoin.

Its really disheartening to see situation get worse to this level and I see a lot of people getting shut out from investing into bitcoin. A lot of people would want to invest but want to try with little amount to have a feel of what it is about but now, that seems like a dream whose possibility to be a reality is only in that dream, yet I see a lot of people still making a case as to why that is happening. I guess the inflow that should come into bitcoin, will have to move on to other alternatives.

I think soon someone will be able to fork effectively, or bitcoin cash will ultimately take over ... I hope this moment comes soon

First of all, you can't transfer $20 with the bitcoin protocol.  You can't transfer U.S. dollars at all.  You can ONLY transfer bitcoins.

I assume you are asking about transferring $20 worth of bitcoins?  But, since the exchange rate of bitcoins is constantly changing depending on current demand in the market, the actual amount of bitcoins will be different now than earlier or later.

For the sake of discussion, lets go with an exchange rate of $14500 per bitcoin.

So, what I think you are actually asking is:

"If I want to send 0.00137931 BTC (1.37931 millibitcoins) what would your suggested transaction fee be to make sure the transaction confirms?"

The answer to that question is also constantly changing, and it depends significantly on how you received those 0.00137931 bitcoins.

That being said...

Based on this chart:
https://jochen-hoenicke.de/queue/#2h

It looks (given the network conditions at the time that I am writing this post) like you can expect to get your transaction confirmed if you pay a fee of at least 0.00000140 BTC (0.00140 millibitcoins) per byte.

Lets assume that you previously received a payment of exactly 0.00164811 BTC to a traditional P2PKH address (address that starts with a 1) which you have not yet spent.  In that case, you could expect to be able to create a transaction sending 0.00137931 BTC which requires no more than 192 bytes and therefore a transaction fee of only 0.00026880 BTC (approximately $3.90 worth of bitcoins at the exchange rate of $14500)

If you received a slightly smaller payment to a SegWit address, then you could pay an even smaller fee.

If you are willing to wait a long time for confirmation (a few weeks), you might be able to pay a fee as low as 0.00000100 BTC per byte (only 0.00019200 BTC in the above example).

Bitcoin has been called "Digital Gold", as an analogy.

To use this analogy, how would I transfer $20 worth of gold? If I had a block, I could shave off a piece, but then I would have to have the weight of the $20 piece certified, as well as the weight of the remaining block. A professional would charge more than $20 for this. So I wouldn't do that.

A practical way of transferring $20 of bitcoin is to use a service. For example, I use LocalBitcoins.com. I have more than $20 worth of bitcoin there. I can transfer that to another LocalBitcoins.com user for 1%. Problem solved.

if it reach to 20k then who know what will gonna happened to bitcoin  it demands will increasing and doing more investment on bitcoin will help bitcoin to move more forwards

And we can't really blame them at all, the developers are closed their ears to the investors and the very thing which was supposed to be free from the control of anyone in the entire, has been hijacked by the developers who have made themselves dictators.Bitcoin Cash will eventually surpass bitcoins.

given that the amount you are suggesting guarantee the transaction, in my opinion it doesn't, $3.90 to transfer the equivalent of $20 worth of bitcoin is around 20% premium on the transaction. A credit card charges 3% to the merchant.

You are welcome to your own opinion.

I'll stick with the facts.


Exactly.  This is why I would not send an on-chain bitcoin transaction to pay for $20 worth of product or service.

There are multiple ways a business could handle it, but in the end on-chain transactions are very valuable things.  Very valuable things are expensive.

I wouldn't use a $14000 diamond to trade for something that is worth $20.
I wouldn't use $14000 worth of gold to trade for something that is worth $20.
I wouldn't use a $14000 car to trade for something that is worth $20.

I also wouldn't use a $14000 bitcoin to trade for something that is worth $20.

Note that the transaction fee is based on what the transaction fee is paying for (space in the blockchain).  It is NOT based on the value of the bitcoins you are transfering.  So, a 192 byte transaction that transfers 1 BTC ($14,500 worth of bitcoin) is going to cost the same in fees as a 192 byte transaction that transfers 0.00137931 BTC ($20 worth of bitcoin).  This is because in BOTH CASES the fees are paying for 192 bytes of space in the blockchain.

The fees system was designed by Satoshi to INTENTIONALLY DISCOURAGE use of bitcoin blockchain transactions for smaller value amounts.  This makes sure that there is always space available in the blockchain for the transactions with the highest value to byte-size ratio.

This was the intended design from the beginning.  Your choice is to create smaller transactions, pay higher fees, or leave bitcoin to those that are willing and able to create smaller transactions and pay higher fees.  This is what the whitepaper was created for. This is what Satoshi's code was designed for. This is how bitcoin always has worked, and always will work.

I'm sorry, does the whitepaper say bitcoin is a digital diamond or does it say it's a digital cash?

where does it say this? looks like this is your own speculation

Now you made him mad! The liom came out! :D
I want to agree and also disagree.
Maybe if you are on the miners side you can understand it and I have heard it.
True that it is congested. We are having problems now because of the overload transactions that are making a wall for the others to enter.
Who made this? Us.
We are so cheap that we want an almost free transaction and miners needs to make a living too.  (Although some of them are really greedy).

Maybe after all of this is cleaned up we should start changing how we do our txs.

To the miners won't change much if the fee comes from mining 2 transactions or one, the fact is that right now the system is able to process 3 transactions per second, and this include the whole world economy! My guess is the miners would be extremely happy to be able to have a system to process more than 3 transactions per second and win a lower fee from each of them

Just to recap ... So far I didn't hear a single valid argument that says why we shouldn't improve the system, I just heard someone telling me I'm stupid wanting to use my cash to pay something is worth less than thousands dollar (or at least 0.1 bitcoins so nobody corrects me)

The miners only care about how much fee is paid per block weight unit.


The fact is that SegWit has increased that number.  You are quoting an old and outdated number.


Your guess is provably be wrong.

Bitcoin Cash already exists as a protocol.  It allows up to 8 MB of block space, which increases the quantity of average size transactions from 3 per second to 24 per second.  And yet, the majority of miners are choosing to mine on the Bitcoin Blockchain where they get higher fees, but less transactions.

And I didn't hear a single suggestion of an "improvement" that would actually work, nor did the original post that started this thread ask for any suggestions for improvements.

The original post only asked how we can "get it back on track" with the whitepaper, and since it is already on track with the whitepaper that particular question is meaningless.

If you want suggestions on how we can handle more transactions with lower fees, then you should have asked that.

Here are some suggestions for you:

• Use SegWit addresses
• Participate in the development, testing, and use of Lightning Network
• Take low value transactions off-chain
• Come up with a viable change to the protocol that increases on-chain scalability, get it coded up, convince people to use it
• Go use some other coin if you don't like what Bitcoin is doing

What's that number now? it's enough to support the transaction needed by the world economy?

Don't you think the miners are choosing to mine bitcoin because of the value of the coin? what's going to happen if the value of bitcoin cash raises?

and still, I haven't heard a convincing motivation to not to improve a system that cannot support the number of transactions that needs to support

Yes. Or more specifically, they are choosing it because of the value of a block.  (Remember the part where I suggested that block space is very valuable and that transaction fees are purchasing block space?)


Not much reason for it to do so.

The block space isn't very valuable considering there is more of it than anyone is wanting to use.

If it does somehow become the cryptocurrency that is most in demand, then it will experience the exact same situation as Bitcoin has today (high fees and slow confirmations for transactions with low fees).  The alternative is to destroy decentralization by allowing arbitrarily large blocks, but the loss of decentralization would destroy the value of the protocol.


It can support the number of transactions that is needs to support.

It can't support the number of transactions that you want it to support.

The motivation to be careful about changes is to not inadvertently destroy what is clearly and provably very valuable.  No sense in killing the goose (https://en.wikipedia.org/wiki/The_Goose_That_Laid_the_Golden_Eggs).

If you have a suggestion for an improvement that is well thought out, and that isn't going to have an adverse effect on other aspects of Bitcoins very carefully balance incentives then I'd like to hear it.  Bitcoin is constantly adding improvements.  Users and developers are not against improvements.  I'm certainly not against improvements.

You started out by stating a bunch of things that weren't true, and then you asked how we can "get it back on track" with the whitepaper.  I responded to that.

You've asked about improvements, and I've pointed out some recent improvements (SegWit and Lightning).

You want more improvements, and so do we all.  For example, I'd like to see more wallets and more merchants supporting SegWit addresses.  I'd like to see more fee estimators reporting in fee per weight unit rather than fee per byte.  I'd like to see more people involved in developing and testing Lightning Network.

Improvements will continue to come as people figure them out.  Do you have any improvements to suggest? Or are you just here to complain about something you don't understand?

You are looking for improvements.

SegWit is an improvement.


I expect it to be usable within 6 to 24 months.


I think you are wrong.


Every user has the same access. No user is forced to involuntarily pay a higher fee per byte than any other user. The fact that the access is valuable and valuable things are expensive is the nature of the universe.


If there is a high demand for a limited resource, it will ALWAYS be inaccessible to those that don't have the means.


I don't think that word means what you seem to think it means.


That is not a solution.  That is not even an improvement.


There are no solutions to the fact that valuable things are expensive.  The option is to destroy the value (then it's cheap and nobody wants to use it, like Bitcoin Cash), or allow the market forces of supply and demand manage access through the effects on cost.


THE owner?  You mean am I THE GUY that "owns" the protocol?

No.  The Bitcoin protocol does not have an owner.

Or are you asking if I have some bitcoins?  In that case, yes.  I have a little bit.


I'm not telling to to go use another coin.  I'm letting you know what your options are for "how we can handle more transactions with lower fees".

Lern to read.  Lern context.  Pay attention.

With fees this high BTC becomes useless for trading, testing or moving around so i guess when people leave then they
won't come back ! Once ripped off, twice shy

Stuff the miners and the developers because it's not hard to add code to limit the maximum fees
and having 20,000 full nodes is barking mad anyway.

Come on nothing could be worse but that too will slow down because the architecture of the block-chain
as it has been implements is the biggest load crap i have seen and was designed to start CPU wars and to waste
energy.

IOTA Tangle is a bit better but the one to watch seems to be HashGraph not that any coin is based on
it yet.

Wit high increase in the number of bitcoin users,the network has become more congested and segwit also seems not helping to solve the problem.The only thing which could be done is to activate the lightning network.

Scaling isn't the sole responsibility of nodes. Peer to peer networks are designed to oush innovations to the edges not to the center. Alot of people don't understand this. Every participant have a responsibility here.

I think, Nothing happens with bitcoin, what you are witnessing is first-hand greed and what happens when a group of people disagree...

I think it's quite clear that bitcoin is becoming increasingly unusable for small value transactions. The reason is well known and widely discussed. :) :)