Bitcoin Forum

Anyone else becoming completely disillusioned because of all the fees?

Start speaking up please.

Which fees?

Fees for convenience?

Bank->Dwolla = free
Dwolla->MtGox = $.25
MtGox->BTC = typically .5% to .6% for majority of users, I imagine

Total exchange fees for Bank(USD)->BTC = .6% + $.25

Fee for transaction in the same currency using Paypal? 2.9% + $.30

Edit: I should have been more clear. I was trying to contrast the fees of going the slow route (Bank->Dwolla) vs. the fast route (buying BTC with PPUSD or something)

Why would I be disillusioned, though?  Even if you're going full-circuit with every transaction, the fees for dealing with Bitcoin are much lower than Paypal or credit cards.

0.6% isn't so bad. You can always get your BTC the old fashioned way. You can earn them. I have never bought any bitcoins through an exchange, and only bought a couple bitcoins off of a miner in person when I started. Everything else was from selling something.

Speculators have their role, but in any health currency they should constitute only about 5% (number pulled from...) of the transactions.

If you have anything you can sell, or can make and sell, or a service that people actually want, then sell them in bitcoins. You don't even need a website. Just use the marketplace. It could use something other than someone selling.

I think once bitcoins (hopefully) become more useful as an actual currency, people wont need to convert them so often. When there are less conversions there will be less fees.

Earn coins, spend coins, win?

If Bitcoinica is actually setting up an exchange like Zhoutong considered somewhere here with a 0.1% fee, mtgox is forced to lower their fees and this will be great for Bitcoin.

Where did you get that from?

Fees for convenience?

Bank->Dwolla = free
Dwolla->MtGox = $.25
MtGox->BTC = typically .5% to .6% for majority of users, I imagine


$1,000.00 Transfer

Total exchange fees for Bank(USD)->BTC = .6% + $.25   =  $6.25

Fee for transaction in the same currency using Paypal? 2.9% + $.30  =  $29.30

$1M is kind of a bad example. With Bitcoin you'll move the market against you, with PP you have some solid chance of getting it frozen or taken.

For $100-$10k Bitcoin kicks ass even if you have to come in from the outside. If you've already got coin it's great from a few cents up. Everyone should have a little bitcoin revenue stream imo.

His example is $1K, not $1M.

Can I get Lasik for bitcoins somewhere?

Forex trades globally are $3.21 trillion (yes with a T) a day.  That is over a quadrillion USD annually.  Compare that to world GDP is ~$60 trillion.

Maybe you got the 95%/5% mixed up.   The reverse is closer to reality.  95% of all economic activity is speculation.  5% is actual commerce.

Probably, may or may not be a real doctor though  ;)

The reason why I love bitcoin is the lack of fees!  I now do most of my transactions fee-less.  I am buying and selling directly with others and have far less in the way of BTC-USD need.  When it happens it is 25 cents Dwolla and .5 % exchange fees, which is pretty low when you do $300 worth. 

Yup.  I only need to pull value back into fiat to pay the power bill so I make a few large transactions each month via Dwolla.  Fewer larger transactions gives me a fee % of 0.1% + 0.5% and that is just on the portion that I convert to fiat.  The funds I don't have even lower fee rate.

https://bitcointalk.org/index.php?topic=60105.0

I think the fees are too high. I buy everything with cash, a debit card (fee is around 25 cents in the US I think), or a check.

How do you use cash online?  I would stick it in the CD drive but most computers do not have them now.

To clarify, if I mine say 0.1 BTC in a pool, I get fees.
If I send that to my bitcoin client, I might *not* get a fee, but, I probably will get charged a fee.
Now if I want to send that 0.1BTC out anywhere else, I have to pay another fee.

Eventually I no longer have 0.1 BTC
so once I get that very small amount amount into an exchange, I have lost quite a bit, and now I get charged fees every step of the way there also, I will get about 25 cents from the beginning total of 0.1.

This is what I mean by becoming disillusioned with the fees, everything takes fees even when it doesn't need them, and now after getting a pretty good idea of what p2sh is trying to do. We will be charged even more fees for the safety they already had built. That's what set me off about this, seeing how p2syh works made me look at everything else. It's the exact same kind of tyrannous infection sneaking in.

I scan it, and then email the image.

0.1 BTC is ~$0.50.  Show me where you can spend/transfer $0.50 online without a fee.

How about don't transfer 0.1BTC.  Transfer 1 BTC and it will be free.  Alternatively wait a few hours and the 0.1 is free too.

25cents is less than 0.05 btc. to lose the other 0.05 on transaction fees you have to make 50 transactions.
btw: who is fuck is going to secure 0.1btc with a multisig?
...0.1btc, seriously...
...maybe you just trade them back for the five wow-gold you bought them for and stick with a currency thats meant as a toy  ;)





ps2: sorry for venting. it just annoys me that of all the thing one could possibly criticize about bitcoin some people really come up with the usually-less-than-one-cent fee.

Visa. No fees for me. May be for seller tho.

High (implicit) txn fees reflect a combination of a marketing gimmick (rapid initial currency generation) and a poor cryptocurrency design choice (aka proof-of-work). A new cryptocurrency would need to be designed from scratch to change this. No one cares.

And no one agrees.

Your PhD is in?

Visa? Yes fees for you! It is indeed for the seller, but how do you think they pay those fees? Correct, they use the money they charge you. So while you aren't directly paying fees, you are indirectly paying fees. If there weren't any fees with Visa, the products would be less expensive.

you seem to care. suggest something useful
and what is your PhD is in? can you link some articles you published?

I have (how else would I know whether anyone else cares?). Economics. Would you associate your public persona with this cesspool?

link to suggestions?
or better yet put them all in a pdf or something, like satoshi did.

Thanks for your expression of curiosity. I will work on a pdf outlining core ideas.

Indeed they are calculated into the cost of running the business, but I don't see them. I prefer my fees to be paid by the seller too.

This allows me to always see the actual prize I have to pay for a product, which is all I am interested in.

I have a Postdoc in ignore.

Lolz

Mike Hearn has suggested that in the future people may accept 0 fee 0 confirm tx for reasonable amounts and only when they total something significant attach a fee which cannot be claimed until all the dependencies are also confirmed. This kind of lets the receiver pay.

But really we're talking about occasional tiny fees right now, it doesn't seem like a problem.

bansky rulz
0 confirmations is evil

To be clear, exchanging any currency to any other currency is not going to be free anyway. Forex has fees, you have to insert and withdraw your money somehow, you have to pay your bank to have your account, it is going to cost something anyway.

Why must it be different with bitcoins?

I use a debit card online. 

I've always thought that merchants only had to pay a minor fee (around 25 cents) on these transactions. But maybe I am wrong?  I know I'm not giving them my PIN.  So maybe it is getting treated as a credit card. If so, that is unfortunate.  The banks are evil!

When you use it online it's run as a credit card with the usual credit card fees (2% or so).

Yeah, very evil, they have given you the ability to use a card online at all, to pay over the internet, to have nice control over your money and not having to keep all the cash in your house. They also have given a lot of businesses a chance to grow and make progress, by giving loans to them. Very, very evil indeed.

The developers have acknowledged that fee size determination in Bitcoin is broken. It could work though, the infrastructure is there, but we need a way to figure out how to communicate fee size between payers and miners.
Don't get too attached to that. Fees will have to be introduced at some point (they already are in some cases). Mining rigs and the electricity they consume is not free.

The amount of energy consumed grows to match the price of bitcoins. Energy is basically the margin cost of mining, and bitcoins is the revenue. Miners will start buying more cards to mine more when the payout is higher, eventually pushing them to an equilibrium where everyone starts complaining that it is not profitable any more.

If the revenue were to drop to 1BTC per block, miners would start unplugging their machines to cut costs, and the difficulty would drop to match this change. Once you win a block, the cost to add a transaction is nearly nil, and to ignore low value transactions will mean that the next miner will be able to take them and pocket them.

Keep in mind that more's law also applies to miners, and 2 years from now all that mining equipment will be obsolete, so unless miners keep buying equipment, they will be replace by a new set of miners who will get twice the hash rate at half the cost (energy consumption probably won't drop).

Unless some miners get 50% of the hashing power (or some cartel forms), market laws will apply, and the cost to add a transaction will be the limit to the actual required fee. All that power consumption and fancy graphics cards will end up being sunk cost at the point of transaction recording, and thus be irrelevant.

Exactly, the whole system is set up to perpetually waste vast amounts of money for no purpose. Brilliant.

The purpose is to protect against double-spend attacks.  Do you know a better way?

After every payment, you send your digital tokens to Paul Krugman who destroys them, creates new ones, and sends them back to you. If it's a double spend, Krugman slaps you in the face and you in turn slap your customer in the face. Voila!

So your solution is "we don't need fees" because when block reward falls 90% then hashing power will fall 90%.  Except if hashing power falls 90% then Bitcoin is vulnerable to 51% attack.

It is possible for Bitcoin to have low fees.  Lower than ACH, lower than VISA, lower than WU but something needs to pay for the network.  If the network is vulnerable to 51% attack then the value of Bitcoin will decline relative to that risk.  If it it is trivially easy/cheap to 51% attack the network then the value of Bitcoin is nothing.


Which provides no security.  New attackers will have access to the same hashing power.  Thus in 2 years 10TH is more like only 5TH now.  If the network is 20TH it is only roughly as secure as it is today.  The nominal network rate is irrelevant.  What matter is the cost of an attack.  Today 10TH is prohibitively expensive.  In 60 years the Iphone 87 may have 20TH/s of computational power.   Moore's law can't make Bitcoin "stronger" because both defenders and attackers have access to the same powerful new gear.


Didn't you say that due to more efficient gear miners will be forced to either turn off rigs or upgrade them.  Equipment has a finite lifespan both physically and economically.  The equipment cost can be computed per hash by block by taking blocks of effective lifespan divided by the equipment cost adjusted for the time value of money.

I have. Just make votes proportional to committed long-term ownership of coins instead of energy wastage. This is called "proof of stake". Search for it. I'm not going through details here because it would just attract trolls. I will only respond to high-level theoretical objections.

Help us out here. Can you cite a peer-reviewed journal?

You mean if there were two miners one having 10BTC and one having 5BTC the 10BTC miner would have 2x the chance of their block being accepted? What is the mechanism for actually deciding? Still hashing, but accept lower difficulty blocks if the block is signed with a private key that holds coins?

Just those words and I've got it. This might be a reasonable solution to my fears about long term sustainability of Bitcoin.  It creates a dozen new problems too, but you've got my gears turning. Thanks.

The word proof is rarely used in science. It is used in theory, such as maths. Unfortunately, even Bitcoin uses the term "proof of work" when really it is only an historical block chain, which is really, really hard (but not completely impossible) to fake.

I'm not aware of any way to fake a SHA256 proof of work with less work than simply brute forcing the hash.  In essence, faking it is a proof of work in itself.

On the other hand proof of stake is really only a proof of either stake or absurdly good luck.  Assuming the crypto isn't broken, though, it's a proof for any practical purpose.

That is it, but with rules that allow for both small- and large-scale operations. The rule you describe would degenerate in to one gigantic hashing pool operated by whoever holds the most BTC.

I have one question about proof of stake. Can stake be acquired by force?

1) Sorry, I would prefer not to discuss fairness, etc. It is too subjective. Briefly, anyone can gain more votes by investing. Or complete control by buying up a majority. This is analogous to a publically-held joint stock company.

2) What happens when you do X depends on the specific rule set chosen. The concept of "proof of stake" is general. I don't want to answer low-level questions that might have different answers depending on the implementation. Please feel free to search the forums for "proof of stake" to learn more details. Details are important, but this is not the time and place for them.

3) Sure, large holders are already extremely concerned with the state of the network. The idea is to exploit their concern to generate "proof" for txn verification purposes. Currently, electricity waste generates "proof". Use of electricity makes the payment system excessively costly. Costs are reflected in either a) currency generation or b) txn fees. Generation and fees compensate electricity wasters for their expenditures. An alternative is to use commitments to hold coins for a long periods as "proof". Since people will hold coins long-term even without an additional inducement, you can get away with paying them very small rewards. By contrast, electricity wasters need to be paid a larger amount. Under the proof-of-work regime, extravagant waste is the basis for security. Under proof-of-stake, the intrinsic interest of long-term investors is the basis of security. If someone has committed to a substantial long-term investment in bitcoin, it is not necessary to demand further "proof" of their benevolent intentions.  

I recommend ignoring questions and comments made by "cbeast". He does not have constructive intentions.

Where do you get the 100 btc? Simple question.

Many possibilities.  Here is one:

Allow for high difficulty mining by individuals without assets. At the onset, no one has assets so everyone has to mine this way. Over time people accumulate coins. Once this happens, it becomes practically impossible for stakeless miners to compete (e.g. like mining with a CPU today). After the initial period, "mining" entry requires purchase of coins on an exchange.

Here's my point. What's to stop a corrupt authority from extorting btc from citizens to fund mining for the banks? Eventually, governments, banks, and big corporations will own most of the mining power anyway, but why make it easy for them by letting them have that power cheap? It's easier to find a mining pool to extort than have to compete on an even playing field with everyone.

tl;dr - On a theoretical level proof of stake seems great, but it is susceptable to the law of unintended consequences.

You are an idiot.

http://i652.photobucket.com/albums/uu244/RastiMinato/invalidrobocopisridinga.jpg

Seriously, some programmers may be very book smart but have little common sense about real world issues. Get a life.

If the government is corrupt then the only solution is something like in lybia and other places: revolution.

my response was to cunicula not you

Heh, I haven't had my coffee yet. Apologies to you Costia.

I'm missing some irony here, but I like the robocop on the horse. The problem is the failure to use logical arguments. I guess "Your argument is invalid" works, but I would prefer "you fucking worthless piece of shit idiot."

I don't think that's the right comparison, in the end I had to pay .6%+0.25c just to own the BTC. With paypal, it's completely free to own paypal USD.

The btc fee advantage comes when conducting transaction. Paypal charges the 2.9%+.30c in transactions. Right now you don't have to pay a fee to conduct btc to btc transactions, though I imagine this will change in the future once mining no longer produce much coins.

I would call "proof by stake" instead "proof by power." If my country has a bigger military than yours, I will demand you to pay a fealty so that my miners will be able to support the economy, "for your own good."

Forum is mental cesspool.

Data points:

So where is this peer reviewed journal or even a good thorough discussion of proof of stake? I think it has been dismissed by the code gods.

Interesting discussions are here:

https://bitcointalk.org/index.php?topic=27787.0
https://bitcointalk.org/index.php?topic=37194.0

I'm not sure that the Bitcoin devs (if those are code gods of which you speak) are necessarily dismissive so much as focused on improvements to the existing Bitcoin model.

cunicula: Since you think proof of stake is better (more efficient, as secure, as "fair") than proof of work, are you working to create a new cryptocurrency based upon those rules? If it is truly better, it should replace Bitcoin, or at least force it to change.

Those threads were pretty much ignored by most devs. I think I read just about everything on the forums on the matter, it just doesn't seem to be a fleshed out idea. I think Stratum does sort of address creating a network of trust, in addition to pools. We'll see, maybe there is some development going on behind the scenes somewhere that will surprise me.

You make some great points. If there is virtually no reward (the fees suck since they just amount to record keeping cost) then there will be no serious mining. If there is no serious mining, the whole system could be in effect shut down.

So what happens at that point? I guess you would have to mine to complete your own transactions, and you might as well take the fees of others while you are at it. So others might feel the same way and put forward gpu power to just get their transactions to be solid. You would see the stamp of miners that you trust and would hash their stuff to help them maintain being on the main branch. . .

So maybe mining would not actually turn out to be for financial rewards. Maybe it would just be a collective of people that own bitcoins, and see value in keeping things in the control of people who aren't screwing up the system. The miners would be the people who have transactions to send and maybe the will need to occasionally resend the transactions when a bad agent tries to derail the works.

Or maybe at this point the pools might become the central nodes and only hash on branches that other approved pools have hashed on. You join a pool because if you mine solo your branch might get ignored (not trusted).

While the returns would be small, the cost of mining is also small.  Instead of buying racks of GPUs and feeding them considerable amounts of electricity, transactions could be signed with no more processing power than a smartphone...  A fraction of a watt for the current scale of the Bitcoin economy.  If you had a large savings account, would you take zero return for free or 0.5% for essentially free?

The efficiency is a compelling argument, and I can see how it would work.  It's just the secondary effects that worry me.

https://en.bitcoin.it/wiki/Transaction_fees

I don't know how to code. I can't even make a webpage. I am an economist, so I have some knowledge of how incentive systems can be used to elicit truthful information (a subfield in economics called mechanism design).

Learn what that means here:

http://en.wikipedia.org/wiki/Mechanism_design (http://en.wikipedia.org/wiki/Mechanism_design)

My backstory is as follows:

1) I became interested in bitcoin
2) thought it was brilliant
3) realized it had huge inefficiencies that could be fixed in theory. (this issue with proof of stake is just one of several things but perhaps the most important)
4) wanted to know if people were interested in fixing them
5) realized that everyone was attached to the current system
6) learned that these attachments were not supported by logical arguments
7) became disillusioned and took to cursing people out.

To be fair, mechanism design people wouldn't listen to coders either. I should not be surprised, but am.

I am looking forward to making money on fee transactions!

fees suck! to say the least  >:(

You can give your fee payments to me if you don't want them.

noo it makes me use 0.0005 minimum

Then transfer more or wait longer and pay no fee.

Do you have any idea how much that is? At the current exchange rate, it works out to $0.0028 - about one fourth of one US fiat cent. Just pay the goddamn fee.

And it goes to support the security of the system.