Bitcoin Forum

I am curious as to why did the fees did drop so much since the last peak of interest, last december.

Is it just because there is less people using Bitcoin as of now ? Or was it because of a low fee transaction spam that took place back then ?
Or on the top of the hype, too much people tried to use it to transact ?

As I see it, if someone broadcasts a sufficient amount of transaction with low fees, legit users will have to put a higher fee to get their transaction included right away.
The "attackers" can slowly raise the fee to drive it up, up to 1000sat+/byte as we saw. Miners could coordinate efforts to conduct this attack since they recover the fees.
With all the BTC/BCH drama, I don't know what Ver and his friends are up to in order to drag people on their coin.

Today, 40sat/byte will include your transaction in the next block.

What are your thoughts on this matter ? What explains the fees dynamics ?

I think you mentioned it already: Transaction spam to slowly raise the fees and to denigrate btc by constantly promoting "btc impossible to use in real life due to high transaction fees" even in television.

I have my own opinion who has interests in denigrating BTC but I wont call names here ... roger that? ;-)

There are quite some points which played a part in contributing to the dramatic fee rise:

• Transaction spam
  As you already mentioned, the spam which was going on in the 3rd quarter of 2017 heavily pushed the prices up. Fortunately this has stopped.
• More daily average user
  The amount of user which actively use bitcoin daily dropped compared to the 3rd quarter 2017.
• No transaction batching
  Some exchanges did not batch their transactions. They instead sent 1 transaction per withdrawal. This has been changed lately.
• No segwit adoption
  The majority of the exchanges did not have segwit implemented yet. Some already have done that. The segwit integration into core also had lead to an inreasing amount of segwit transactions
  and therefore to lower fees.

Because of all these points (and changes done) the fees have significantly dropped compared to december 2017.
Scaling is a huge task. And it is going to be achieved slowly.

Quite possibly the spam attack. The change in the transaction volume was too drastic for me to consider it not to be partially due to someone spamming it up. Of course, it was pretty popular then.[1]
I definitely have my reservations that major miners didn't have this idea. It's a pretty feasible method if they do control majority of the hashrate and hold large farms. They can easily create the impression that high fees are needed without actually losing much money. However, with the generally lower volumes, its effectiveness is much lower.
[1] https://jochen-hoenicke.de/queue/#0,1y

SegWit with it's bigger {more efficient} Block size, makes it more expensive for spammers to spam the network. Less spam,

will decrease miners fees for the rest of the people. The MemPool is also virtually empty now, so this makes spamming even

more difficult now. Yes, the transactions has also decreased since then, so that also contributed to the current situation.  ;)

One of the major reason which I feel is that the transfer which was happening at that time due to high price has now being drastically being dropped. So the network congestion has dropped immensely. Also many of the users have now shifted to lightning network due to which the load has now shifted a bit form here and thus resulting in a lower fees now.

So will 5 sat/byte, and often 1 sat/byte is even enough. I wouldn't call 40 sat/byte "low", you're highly overpaying if you pay that much.

I want to add 3 possible reasons to bob123's list:
1. Fees went up so much because wallets with "automatic fees" were competing against eachother. They all tried to outbid others, which resulted in higher fees, while we were all still waiting. I've seen many threads where people complain their 400-600 sat/byte transaction was still unconfirmed after a very long time!
The "recommended fee" was quickly not high enough anymore, because all transactions after yours would have a higher fee.
I've also seen Bittrex pay thousands of dollars in fee, up to 5 times higher than needed at that moment, to prevent their transaction from getting stuck.
Back to your original question: it actually took quite a while for my Mycelium wallet to lower the recommended fee. It felt like it was waiting for other wallets to lower fees too.

2. At the peak of fees and Bitcoin price, miners were taking $40 million per day in block reward and fees out of the Bitcoin ecosystem. That drain of money needed a huge inflow of new capital to be sustained, and that clearly ended (at least for now). If less money flows into Bitcoin, there's also less available to spend on fees.

3. Blocks aren't full (https://blockchain.info/blocks). Even though at least one mining pool rejects transactions with less than 5 sat/byte fee, there's no need to pay a high fee if you don't have to compete against other Bitcoin users.

In which wallet you are seeing the fees for the transaction is 40 sat/byte From the time price started dropping from that time onwards we will find the cheap transaction fees in online wallet as well. There are many people mentioned that mempool seems completely low after it bro.

Still desktop wallet have 100 percent segwit implementation are able to go with the cheap fees to make the transaction. After segregated witness we seeing fees has been dropped and miner fee also reduced.

I think BTC tx fees reached ~40$ in December simply because the price of BTC was increasing insanely and new purchasers didn't care how much they'd have to pay for a tx, as they were buying large amounts and time was the priority. Now, as the price has dropped the agiotage has toned down and tx fees came back to standard.

SegWit itself didn't reduce the fees.
SegWit 'restructures' transactions and introduced a new unit (weight - instead of size).
Due to this changes the size of a transactions is lower compared to non-segwit tx's, resulting in lower fees.

You seem to missunderstand the term 'fee'.
There is just one fee. It is the transaction fee (which is required to get your TX included into a block, depending on the mempool).
This fee is also often called 'miner fee'. It is just another term for the transaction fee. Those are not two independent fees.

Even I am so curious to know about the reason. You see that when the price was increasing the fees increased considerably and even people were using btc too much as the transactions were too high. But now if you see prices have gone down and so are the number of transactions? It realy is too dubious. Really looks like a fees scam. Can it possibly have any connection with the LN? Miners know that LN will surely cut their share from between so they might be ready to lower the fees a bit in order to continue normal btc protocol so they could earn more?

The miners do not set the fees. You set the fee you pay for each transaction you send, or the software client or online service you are using does so. If you pay too small a fee then your transaction will not make it onto the blockchain. But the fees put into each transaction are 100% set by the party sending the transaction (either you or the software you are using), 0% by the miner.

Some miners are suspected of having manipulated the market by spam attacks that force the rest of us to jack up our fees in order to make successful transactions. That's one way that miners can manipulate the market, and it's pretty clear it was done last year when fees were running much higher. Another is by mining empty or near-empty blocks when there is no valid reason for doing so. So miners can try to manipulate or influence the fee market, but they have no direct control over the fees set by users.

Really makes you wonder just how many spam transactions there were during the time where it was costing $20-$25 to send bitcoin’s.

Right around New Years I had one transaction stuck unconfirmed for two weeks.  It was sent by an exchange, where they squeezed in many inputs (large file).  At the time an average fee was around $450 for my tx - I tried to pay for accelerated service, they wanted ~ $6,000 to do that.  It was a joke - a feeding frenzy...

Got scammed by a couple guys from this forum...sad human behavior...

why did you not change to LTC or XRP in exchange and then transfer out with that?

Over the past few years, bitcoin has been growing so transaction fees have increased. I think this is what managers want, the increased transaction fees will benefit the bitcoin trade. However, the transaction fee has been reduced sharply
So, why do the fees dive? The simple answer is that currently the user is making fewer transactions. In December, there were about 400,000 transactions per day, while bitcoin today had only 200,000 transactions, according to data from Blockchain.info. This will affect the purchasing power of bitcoin and their price will decrease.

From user to user it dropped indeed. I think segwit was a major cause. But most of the exchanges still keep 0.001 BTC to withdraw your purchased BTC. Which is simply greedy! Coinbase is still not available worldwide, I'm using dsx.uk (http://dsx.uk) to buy BTC with fiat and have to pay that outrageous fees.

The btc price drop is the major reason due to which their is sudden fall even in the fees. Another reason may be due to lightning network as many have shifted to that and thus we have less jam now days on the block chain. Even many users are staying away due to fall in price and they feel it will fall further.

$55 just to process 250 bytes of data is what has killed bitcoin and no one will trust the development team or the miners
ever again for this reason.

ETH didn't go down this route when they had a mad rush due to crypto-kitties and a lot of people who have educated themselves
about Bitcoin can see that the lightning network is both off-block and consists of banking hubs so I think it's game over myself and
the charts appear to agree with me but we will see.

I jumped out mostly at $18k due to fees being so high and warned people to put a stop-loss on at $10k so my track record is quite in-tacked
when it comes to looking in a crystal ball.

A decentralised network is by definition a hub and spoke architecture. I remember from your previous posts that you make a point of referring to 'banking hubs'. Can you tell me which hub on the Lightning Network is owned and operated by a bank?

Well all the ones with more than 20 channels open, you know ran by the miners because only they have the hardware, skills and BTC to run
these banker hubs and past history shows just how much we can trust these miners.

if it charges transactions fees and interest on the BTC to keep the ledger open, it's a bank

If that was true why not call them mining hubs? Do you have any evidence to support the claim?


I think you are not quite aware of what constitutes and bank.

https://en.oxforddictionaries.com/definition/bank


An open channel is not a deposit. Lightning Nodes are not free to invest coins in open channels. Lightning Nodes do not make loans or exchange currency. Claiming that running a Lightning Node makes you a bank is disingenuous. But you already know that. That's why you do it.

I think they dropped because the rate of the coin has dropped

Yes lots, try looking at the word "Fees" in this document https://lightning.network/lightning-network-paper.pdf
or see the network map that is sure as hell is not mama and poppa small time banking you know.
https://lnmainnet.gaben.win/

Still lost then watch the video https://www.youtube.com/watch?v=I6RoG2L7Qsw&feature=youtu.be or pop outside
this site where we can have a real debate on the subject without having a bent moderators with a vested interest in this subject

 

Try coming up with a new argument.  Preferably one that in reality qualifies as an argument.  Regardless of how many time you repeat it, the number of times the word "fee" appears in a whitepaper is not evidence of anything, except perhaps proof that you can't comprehend the meaning of the whitepaper, so all you can talk about are the fees.  Fees which, in many cases, will be lower than using mainnet alone.  The main reason your failed attempt at an argument never makes an ounce of sense is because people will generally only be using Lightning when it saves them money on fees.



If a company has 100 customers who happen to be using LN, they might have have lots of channels open.  Large companies may eventually have thousands of customers with channels open with them.  Doesn't mean they're a bank.  Doesn't mean it has anything to do with miners.  Chances are, it doesn't mean anything you're ever likely to think it means, because all your thoughts are insane.  You constantly linking to the network map is also not evidence of anything, except perhaps proof that you can't comprehend the meaning of the network map.  

Perhaps your efforts would be better suited to continuing to pretend you're a competent developer and actually trying to code something useful.  I mean, I'm not really expecting you to contribute something of worth to the community, so it's probably a long shot.  But debate clearly isn't one of your strong suits.  I still haven't figured out what it is you're actually good at, so all I can go by is telling you what you suck at.  Which mostly includes posting.  Maybe do less of that.

Let me get this straight. You use the pejorative term 'banking hubs' so I ask you to point out any lightning node owned and operated by a bank. So you then say that any node with more than 20 channels open is 'ran by miners' (sic). Leaving aside how laughable it is to call someone running an S9 a financial institution I ask you if you have any evidence to support that claim. You come back with the number of times 'fees'  is mentioned in the whitepaper and the link to a network map. ROFL.

Looking at the network map there is an interesting data box in the top left corner.


That's right the fees are too tiny to measure.

Other than that the map shows a textbook example of a decentralised, meshed, hub and spoke network architecture.


Your inability to follow a simple set of forum rules != censorship.

No need to given the facts that clearly you cannot address.

What part of charging transactions fees and interest on BTC needed to keep channels open don't you quite understand when I like many
more people call the lightning hubs "Banks" 

The deception has been blunted and will get turned back because truth tends to stand up to the test of time.

0.6% I think is the rate but lets think back, yes I remember "Virtually free transaction fees" and we watched as
these fees hit $55 per transaction and have no guarantee that the same scam won't happen again from the miners who
are hosting the lightning network banking hubs.


I don't mind rules so much but clearly here we have one set of rules for the party faithful spreading FUD
and another set of rules for everyone else so save the bullshit because I am not taking it.

That website is outdated, use this one:

https://rompert.com/recksplorer/

It has more nodes noted, I think the old site is not caching all of them. We are at 1777 with 5926 channels, it looks good.

I see LN as a viable way to transact in small amounts, say of $100 and below that. The safety and decentralization levels are away higher than those found in the legacy banking system. For transactions of higher value on-chain should be viable for most people.

It's still the best approach i've seen to "mass scaling" a coin, because the layer 0 is not involved. Let's see who can do better.

Whenever are seen the bitcoin transaction before the peak value touched in November and october month. All happening because of mass mining migration on various coins especially bitcoin cash.
That drastically bitcoin transaction fee has been increased but now again back the right level we were before. Segwit is enough for the current usage of bitcoin. I know that lighting may speed up the transaction but until many legalization been done they we go towards it.

I addressed them here (https://bitcointalk.org/index.php?topic=3198986.msg33715799#msg33715799) and then you didn't reply to me.

But what you fail to address, every single mind-numbingly stupid time, is that the fees will be lower for transacting over LN than they will be on-chain.



What part of being infinitely better than banks don't you quite understand?  There will be no fractional reserve.  There will be no bail-ins or bail-outs.  There will be no central bank.  There will be no quantitative easing.  There will be no KYC/AML.  There will be no bank holidays.  None of your mindless bleating about fees will change that.  Yes, there are fees.  I think we've clearly established that.  But again, lower fees.

Why would you incessantly bitch and moan about fees when talking about the very thing that can save people money on fees?  And then as a bonus, you get all those other advantages of not using banks.



If you had even the slightest clue about how Bitcoin works, you would be aware of the fact that miners don't determine the fee.  It's down to each user how much they're willing to pay for a fast confirmation.  However, in Lightning, you'll be able to set a preference to simply not route through channels exceeding your desired fee.  If there is a hub charging more than you're willing to pay, you won't be routed through it.  Problem solved.

---

Now just for a change, try to address those points, with an actual, rational argument.  Not just coming back with the number of times the word "fee" appears in the whitepaper.  Just once, rather than accusing other people of not addressing the points, you address them.  Respond to each of those three points I've raised.  I eagerly await a coherent and sensible reply.

That's strange.  I can still see them (with the notable exception of the one you clearly just deleted yourself).  They probably deserve to be deleted, but they're still there.  Maybe you're just avoiding the fight because you know you can't win, so you have to keep lying and playing the victim when someone calls you out on your bullshit.

You can't address any of the points thrown back at you.  You simply don't possess the understanding to counter valid arguments, so you just keep repeating how many times the word "fee" appears in the whitepaper and calling hubs "banks" when they aren't.  

I understand perfect well, thank you.  And I hope one day you develop the understanding to see what you did wrong here and why no one's falling for it.

Wot you mean like $0.01 per transaction like it was not so long ago on Bitcoin but instead I am reading that the LN charge is
0.6% per transaction instead so thats like much cheaper than it was when tx fees hit $55 and killed Bitcoin but you still want me
to be happy about it.

Remember the bit about "Virtually free transaction fees" well that was a lie as is the whole of the lightning network
with it's banking hubs not being as described in the official propaganda sheet about Alice and Bob running the hubs.

People are voting with their feet over the way they have been treated by the development team and miners and poor
excuses from the party faithful here won't bring them back.

I must say sorry for that one, thought my reply had been deleted as is often the case here but I was mistaken, another two post got deleted instead but
the field is not level here, I am not sorry for that bit.

Do you want a pop or do you want to hide up your mother skirt or not ?


No bullshit is not accepting that Tx Fees + Interest fees =Bankers as can be seen from the lightning network map
or do you also have trouble understanding pretty picture too.
https://lnmainnet.gaben.win/

Your words smith does not cut it here, facts win every time and the news is out anyway
https://www.youtube.com/watch?v=UYHFrf5ci_g with lots of people agreeing with my view
on things so what are you trying to achieve.

Again, there's a preference to set your desired fee limits.  You won't be forced to pay what any given hub might want to charge.  And it's in the hubs' best interest to not get greedy.  Any hub that charges too much won't get any fees at all because people simply won't use them.  They'll have to compete with all the other hubs.  You will be in full control of what you choose to pay.  There will likely be "negative fees" where you actually get paid to go through certain hubs as they try to rebalance their channels.  Your wallet software will always find the optimal route.

And it's not propaganda about Alice and Bob running the hubs.  Every single person with bitcoin can choose to run one if they want.  With banks, there's only a limited number you can open an account with in any one area.  With Lightning, you won't have those restrictions.  

You wouldn't be allowed to open a bank.  Law enforcement agents will come crashing through your door if you tried.  But you can run a Lightning hub, or multiple hubs, no one can stop you.



Again you're just repeating the same thing when your point has already been countered.  How many times do I have to explain it?  I've addressed this point here (https://bitcointalk.org/index.php?topic=3196050.msg34257339#msg34257339) and here (https://bitcointalk.org/index.php?topic=2679337.msg33761688#msg33761688).  Large companies will naturally have lots of channels open.  That's the whole idea you utter simpleton.  It categorically does not make them banks.  It just means they have lots of customers with channels open.  Customers who saved money on fees by making repeated purchases and not having to pay a new, separate fee each time they want to buy something.  Why won't you address that point?

Yes we had that option with some wallets on BTC but if you didn't pay the crazy fees demanded then your money went
walk about for days so lets forget about "Market Forces" and "Competition" between miners because clearly it was not working
and the reason is because ten big mining pools account for 90% of all miners or would you like a link with that one.

Your argument "Any hub that charges too much won't get any fees at all" is blown out the water unless you want to
re-write the history books here.


Large companies are not the major users here, Joe public is and he's afraid to open more than one channel because fees to close and settle "On-Block"
can reach as high as $55 on top of the fees charged by banking hubs which all so put paid to any debate about bitcoin still being decentralized because if
the hub is down then the user is down too.


Do save the "Spend to save" argument because it's cheaper today than it was yesterday because we were happy when fees were $0.01 and didn't even kick up
much at $0.50 but then they went too far, feed you problem-reaction-solution and your "loving it" so I have to ask if your a miner or not ?

You're comparing apples with oranges and, at the same time, somehow confusing oranges with coconuts.   ::)

It doesn't matter what happened in the past with on-chain fees, because none of that has anything to do with what fees LN hubs might choose to charge, or what you choose to set your fee limit at.  It's an entirely different system.  One where you need to figure out how it works first, before you try and argue about what you think is wrong with it.

And, despite literally just explaining it to you, try to keep up, mining fees weren't "demanded" by anyone.  If you think they were, you're the one rewriting the history books here.  On-chain fees are like bids.  You want in urgently, you bid high.  Nothing is "demanded".

Thankfully, LN is pretty much the complete opposite of that bidding war.  Hubs will charge the lowest fees possible in order to attract your patronage.  They're effectively the ones bidding for your services now.  Doesn't that sound nice?  This is clearly an improvement, so it's mind-boggling that you're so averse to it.

I'm guessing all of this is new information for you, since you clearly don't understand anything I'm saying here.  Rather than me repeat myself a few more times, how about you spend some time actually trying to understand the meaning of the whitepaper and not just counting how many times certain words appear or looking at pictures of the network map and jumping to completely unrealistic conclusions?



It will make Bitcoin far more useful if large companies start accepting it, but they can't do that if we don't have any room in the blockchain for all the extra transactions that would be generated.  Joe Public will be glad to see new places where they can spend their BTC, whilst saving on fees at the same time.

When card payment systems go down, the user is down too.  Nothing new there.  I can think of at least a dozen times in the last few years where the place I work hasn't been able to take anyone's fiat money for a few hours due to some system bug or another.  Yet strangely, the internet usually stayed on, so perhaps LN might even be more stable than my employer's card system.



Nope.  Straight away recognised mining for the arms race it is and wanted no part of it.  I don't want to be lumbered with outdated hardware that functions purely as an inefficient space heater.  I leave that game of chance to others.  There's a mining subforum here on the boards and I can't imagine I've made more than 5 posts in it since I arrived here in 2013, unless perhaps the threads were moved to those boards after my reply.

No i am not Mr Words Smith


Yes it does, miners who will be running the LN banking nodes have broken the trust, trust that is now called into question and only a fool
would want to forget history.


I have addressed this in detail already, read what i am saying, stop rewording it, gets boring it does.


Give over, everyone knows that in late December you paid $30 or more or your money went walk about so yes it was "Demanded"
and words smith won't change it.

No it's not, same people running it, same monopoly but the plan is more of a divide and conquer and I am dammed if I will pay
0.6% to send $1000 across the wire when my fiat bank will do it for free and other alt-coins will do it for next to nothing.  



Again I addressed this, see comments about competition not working in the past and stop repeating the same answer.


I am guessing you did not read or understand the LN white paper, try doing a word count on the term "Fee" because it pops up
45 times, ask mum to help if needs be will you and read the thing.

Lets have facts and for fiction stories we have already been feed the tripe about Bob buying a cup of Coffey from Alice
28 times in a month but it's obvious from the network map (I KEEP SENDING YOU) it is not Bob and Alice banking by any means.

VISA and Ripple have backup systems, replicated servers, Lightning hubs have nothing so what was you saying about apples and oranges
again.


Maybe hope for you yet.

Ah.  Now it makes sense.  I guess the Lightning Network is a pretty huge threat to Ripple.  I can see why you don't like it now. 

For someone who claims they don't like banksters, it's funny you should be a fan of the biggest barely-qualifies-as-crypto banker hub that exists in the world right now.  Thanks for playing, but I'm pretty sure you just lost.  Expect to see a link to this highly revealing and informative post when you start talking shit in future.

Tell me, as I'm assuming you're the expert, how many times does the word "fee" appear in the Ripple whitepaper?    ;D

So you cannot answer me when I point out that an LN node does not and cannot meet the definition of a bank. You switch to claim that larger nodes are run by miners but you cannot back that assertion up with any facts. Now you just go back to your incessant whining about fees and ignore that I called you out on your bullshit 'banking hubs' but continue to use it.

Explain how an LN node is "A financial establishment that uses money deposited by customers for investment, pays it out when required, makes loans at interest, and exchanges currency."

Provide evidence that "all the ones with more than 20 channels open, you know ran by the miners".

You make false assertions and then ignore it when you are challenged to back them up.


I didn't say whether you minded them I pointed out that you are too dumb to read, understand and follow them.

Unofficial list of (official) Bitcointalk.org rules, guidelines, FAQ (https://bitcointalk.org/index.php?topic=703657.0)


You keep breaking the rules and that's why your posts get deleted. There are 3 posts of yours on the last page including the one I just replied to that broke that rule and might get deleted. http://archive.is/Xjoly You could never post a coherent argument that anyone would consider a threat worth censoring. Don't flatter yourself by thinking you have anything to say anyone would want to suppress. All you can do is use a false analogy. There is nothing remotely similar about a bank and an LN node. Go back and read that dictionary definition of a bank again, then read it again and again until you finally figure out what it means.

If the so called "lightning banking hubs" which is how some people call nodes with many channel connections as far as I can tell, become a treat to the community, namely, enforcing KYC, censoring transactions, reporting transaction data to feds and whatnot, they will simply get ignored and ostracized by the community, so unless they want their lightning operation to be rendered useless, they will behave. The free market will once again decide their viability.