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Title: Having trouble understanding transaction fees. Post by: muasktak10 on March 27, 2012, 07:46:18 AM At what part of the mining process are transaction fees actually used?
If I mine in a pool, and withdraw my btc from that pool into my btc wallet, is that where the transaction fee will be initiated? and the transaction fee is not mandatory, but if I want my confirmed btc in my btc wallet quicker I must use a transaction fee? I read everything I could find, but I'm still really confused. Title: Re: Having trouble understanding transaction fees. Post by: koin on March 27, 2012, 09:37:58 AM If I mine in a pool, and withdraw my btc from that pool into my btc wallet, is that where the transaction fee will be initiated? it is up to the sender (in this case, the pool) whether or not to include a fee on a transaction. you didn't say which pool you use. the pools can differ in that some might add the transaction fee for the withdrawal / payout payment and others won't. Title: Re: Having trouble understanding transaction fees. Post by: muasktak10 on March 27, 2012, 04:52:27 PM I'm in slush's pool
Title: Re: Having trouble understanding transaction fees. Post by: benjamindees on March 27, 2012, 05:30:45 PM It is usual for the pool to cover the transaction fee when you make a withdrawal, though that may not always be the case.
Title: Re: Having trouble understanding transaction fees. Post by: muasktak10 on March 27, 2012, 06:02:10 PM I still don't understand what the point of them are, even if I won't be using them.
Title: Re: Having trouble understanding transaction fees. Post by: Sicks3144 on March 28, 2012, 12:35:17 PM I'm new to it all as well, but my thinking of them as a bribe to get miners to process the transaction sooner seems roughly correct.
Awaiting beatings for being wrong, now .. Title: Re: Having trouble understanding transaction fees. Post by: DeathAndTaxes on March 28, 2012, 01:03:40 PM I still don't understand what the point of them are, even if I won't be using them. The network has a real tangible cost. Fees pay that cost. Now Satoshi was smart and realized in the beginning the cost of a secure network would be higher than fees can bring in. So that either leaves the network horribly weak and underfunded or fees so excessive nobody wants to use the network. So he created a block subsidy which also solves the problem of initial distribution of coins in a fair manner. Miner total compensation = subsidy + fees. Currently the subsidy is 50 BTC but that declines over time. Eventually the subsidy will be 0 BTC and long before that it will be <1 BTC. Today: Miner Total Compensation = 99.9% subsidy + 0.1% fees Some point in the future: Miner Total Compensation = 50% subsidy + 50% fees Eventually once all coins are mined: Miner Total Compensation = 0% subsidy + 100% fees Title: Re: Having trouble understanding transaction fees. Post by: muasktak10 on March 28, 2012, 09:26:00 PM I guess that makes sense, it's better than just printing more money like the federal reserve.
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