Bitcoin Forum

oh wow.  that's pretty snazzy.. answers my question!  I felt like the fees would get higher and higher as the years go by and eventually I would feel like Paypal with my mining rigs dealing transactions..

thx guys!

I thought of maybe shifting the decimal place so we would end up with 210,000,000 bitcoins instead of 21,000,000 bitcoins and keeping the transaction fee at BTC0.0005  So everyone's wallet goes up by *10.  Then we can still easily deal with whole integers called a bitcoin instead of a milliBitcoins once the BTC/EUR/USD value plateaus over $100 a coin.

I could send you a single satoshi right now without a fee.

Really? Don't dust outputs require a certain minimum fee regardless of priority?

Yes, and it's not a problem. The security requirements for micro-transactions are not as high, so using payment processors or p2p micro-banks would be fine.

In fact, it has the advantage of being much faster. Your savings would still be safely in your own hands, and if tx volume at any given time is small compared to the cost to gain peoples' trust, micro-transaction fraud yields no profit.

You keep bring up this moving the zero nonsense.  It would change anything also it will NEVER (I don't mean unlikely I mean NEVER) happen as it is a hard fork on a unnecessary change.

Bitcoin can handle micro transactions just fine.  The scenarios describe above are talking about years (maybe decades) down the line.  Even if more advances services are built on top the platform is still open and that allows cross compatibility and open free markets for those "gardens".  Hardly walled, more like picket fences.

I would say "low transaction fees" although remember it is very likely free tx will remain viable for a long time.  It won't be realtime but if you are willing to wait hours or days I am sure someone will include it for free.  Still low/free can be very very low.  If Bitcoin scaled to PayPal sized network (~50tps) that would be roughly 1.5 billions transactions per year.  If avg fee was $0.01 USD it would be the cheapest payment platform by far and would still generate ~$15 mil a year to fund miners and protect the network.

I believe miners can chose which trasnactions to mine, so I'm sure some miners wont care and some miners aim for the higher transaction fees. The spam prevention is up to the miners but the official client helps with that spam prevention by hardcoding an annoying message to include a tx fee

Miners dont have much choice to refuse tranactions yet if they want the population  to use bitcoin ,nobody is going to wait a few days on transaction

(if transactions are not processed ,all the coins will be worth zero )

I thought bitcoin was all about being open and zero transaction fees.

So bitcoin for micro-transactions in the future is a no go unless you stay within a walled garden.  I thought bitcoin was all about being open and zero transaction fees.  Those are two of its biggest sellers.  Cut them out too early and slow down bitcoin adoption.  The whole bitcoin market capitalisation is still under $100Million yet they sound expensive to buy at nearly $10 each and too expensive to transfer for frequent open micro transactions.  Revalue bitcoin once it's spent twelve months plateaued over $10 to 210,000,000 coins from 21,000,000 and revalue everyone's wallet by *10 keeping the transaction fee at BTC0.0005.  Plus keep doing that until the bitcoin market-cap is worth trillions of dollars and they are mainstream worldwide.  So take this bitcoins are worth $100 each and a transfer costs $0.50 yet the whole market-cap is only $1Billion.  Sounds like bitcoin would be getting too big for its boots when you look at how many dollars are in circulation in bills and coins.  Plus those in circulation as bills and coins are only the tip of the ice-berg.

allten both of your posts are false.  No reason to jump from one fallacy to another.  Can Bitcoin be free forever and for 100% of transactions?  No.  Obviously not the network has a real cost.  The idea that Bitcoin has to be expensive is equally wrong.

Two examples:

PayPal scale network:
The Bitcoin network reaches 50 tps (roughly PayPal sized); that is roughly 1.58 billion transactions per year.  At an avg tx fee of $0.01 USD that would generate ~$16 million in revenue for miners.   Now obviously it will take some time for Bitcoin to grow to this level so the established history means that Bitcoin will be seen as less risky relative to today.  Risk determines return on capital.  Lets assume miners are willing to accept a 10% ROI and that hardware costs makes up 80% of lifetime mining costs.   That puts the network hardware cost at ~$200 million.   Remember it is the cost of the network (not hashrate) that determines security.

VISA scale network:
The Bitcoin network reaches 4000 tps (roughly VISA sized); that is roughly 130 billion transactions per year.  At an avg tx fee of $0.02 USD (higher utility given Bitcoin is now as popular as VISA) that would generate ~$2.5 billion in revenue for miners.   Now obviously it will take some time for Bitcoin to grow to this level so the established history means that Bitcoin will be seen as less risky relative to today.  Risk determines return on capital.  Lets assume miners are willing to accept a 7% ROI and that hardware costs makes up 80% of lifetime mining costs.   That puts the network hardware cost at ~$200 million.   Remember it is the cost of the network (not hashrate) that determines security.


While $0.01 or $0.02 isn't "free" (remember that was just the hypothetical average cost, some tx would still be free) it is hardly "high cost".  The idea that Bitcoin can only scale under high transaction cost is simply FUD.

Lets compare that to some other payment networks:
Money Order - $0.50 to $1.00
Cashier's Check - $5.00 to $10.00
GreenDot MoneyPak - $5.00 (instant, limited deposit options max of $500)
ACH - ~$0.20 per tx (3-5 days)
Bank Wire - ~$10.00 (4-5 hours)

WU - 4% to 10% (10 to 30 minutes)
Credit Cards - $0.30 + 3% (seconds  chargeback risk for 120 days)
Credit Cards (micropayment) - $0.05 + 5% (seconds  chargeback risk for 120 days)
mPESA - 5% to 15% (instant)

Bitcoin - $0.00 to $0.02 per tx (instant to hours depending on risk profile)

Yup Bitcoin is horribly expensive at $0.00 to $0.02 per tx.

You keep bring up this moving the zero nonsense.  It would change anything also it will NEVER (I don't mean unlikely I mean NEVER) happen as it is a hard fork on a unnecessary change.

Bitcoin can handle micro transactions just fine.  The scenarios describe above are talking about years (maybe decades) down the line.  Even if more advances services are built on top the platform is still open and that allows cross compatibility and open free markets for those "gardens".  Hardly walled, more like picket fences.

Bitcoin, as it was originally designed and currently operating, cannot scale to the same level as other well known payment processors (i.e. Paypal and Visa) while keeping transaction fees relatively cheep.

1) Block propagation: The bigger the block the higher the risk of it being orphaned. TX fees will have to out weigh that risk.

2) Block chain growth. Hopefully miners feel the duty of being full validating nodes and the only way to do this is with the
    full block chain not pruned. As soon as you begin pruning, you start relying on miners to be honest and can no longer
    rely 100% on math and cryptography. This would be a negative to bitcoin if the full validating nodes become too centralized.

At $0.02 per tx and VISA sized network we are talking about $2.5B in revenue for miners.  More than enough to support the costs of the network.

Any idea what is the current revenue for miners?

Regarding transaction fees, right now the fee is pretty reasonable at the price of a bitcoin...  But if transaction fees go up (more sites like SatoshiDice flooding the network?) and the price of a bitcoin goes up (eventually, to like $100+ theoretically), then the transaction fees might get really high.  To send a BTC right now, you might pay like 0.0005 BTC I think, doesn't seem like much, but what if you wanted to send someone a really small integer, like 0.0005, you would pay like double in fees.  If a BTC is trading for $1000, that makes 0.0005 tx fee cost $0.50...  That's not much either, but you pay that on tiny transactions.  Sometimes I go to send a BTC, and I guess if there are multiple small bitcoin addresses that it needs to send from, and I pay a 0.01 fee.  If the network gets very congested and the BTC price goes up (like it's destined to do), won't it be unaffordable to send small amounts of money?

FYI, at the protocol level, there are only Satoshis, no bitcoins. So moving the decimal place is a simple client-side update. You'll confuse other people, but it's your choice if you want your client to tell you that you have 10 times more than you really do.

Transaction fees may need to go up in the long run to maintain network hashing power.

Just to make sure it is clear how it works.  If there is more network hashing power than is supported by the current level of the block reward compensation plus the transaction fees, then that excess capacity will go away (i.e., unprofitable miners will stop mining), and an equilibrium will be found.

Just to make sure it is clear how it works.  If there is more network hashing power than is supported by the current level of the block reward compensation plus the transaction fees, then that excess capacity will go away (i.e., unprofitable miners will stop mining), and an equilibrium will be found.

Yes the block chain still generates fine. But people may start feeling insecure if it's getting a lot easier for some entity to launch 51% attack. Thus the network would be under pressure to raise transaction fees to increase hashrate.

Even if people don't think 51% attack would become real, I think if there is a competing altercurrency gaining hashrate users may start migrating to that currency so there is going to be market pressure for bitcoin to raise transaction fee so as to maintain its lead in hashrate.

You can do that now...  mBTC or even µBTC. Makes me feel better about my balance. :)

Seriously, to those of you who think "21 million isn't enough", or "micropayments will be too expensive", I suggest you start thinking in terms of µBTC1 as equal to $1. That puts (unless I've miscounted somewhere) the satoshi at parity with the US cent, and since transaction fees are adjustable down to a single satoshi, and completely voluntary, there's nothing to worry about.

+1. Moving the decimal place doesn't change anything that isn't already easily handled by people familiar with the metric system. And it would seriously futz with the data types in the client.

It wouldn't require a hard fork.  Just make the change on the client front-ends.  1 BTC = 10 BTC on the client-side display.  No one would know the difference besides the programmers.

I think bitcoin would be better off with a very low price but a very high value.  Moving the decimal place would help that.

Settings > Options > Display > Unit to show amounts in > µBTC

Problem solved.

Exactly  Bitcoin does have a very low price:  ~$0.1 per mBTC and there will be a high number of units ~21 billion mBTC.   

Settings > Options > Display > Unit to show amounts in > µBTC

Problem solved.

I don't use the default bitcoin wallet and neither will new adopters or the masses.  Calling them micro/milliBitcoins and working in different values requires more effort and thought for new adopters.  Just having a single simple unit that is easy to correlate with the $/€/£ would be simpler and ease adoption plus use.   

We do have a single simple unit that is easy to correlate with the $/€/£. it is the BTC.
Currently the exchange rates are:
1BTC = https://btcticker.appspot.com/mtgox/1.00btc2usd.png
1BTC = https://btcticker.appspot.com/mtgox/1.00btc2eur.png
1BTC = https://btcticker.appspot.com/mtgox/1.00btc2gbp.png

Tell me what wallet application you use, and I may be able to provide the steps necessary to achieve your goal in your application.

Yeah how to get a blockchain.info/MyWallet to permanently stay in GBP  ???

If there is no rush, then send without any transaction fee. I feel bitcoin wouldn't work for a pay as you read system or alike for online newspapers. The confirmation times are too slow, I want to click and read, it click, wait upto 20minutes them read...

Well, this morning, Mt.Gox informed us that they will require a 0.001 BTC transaction fee to "increase the speed of transactions in the network."
At current prices, that is over a dollar (US).  That's getting expensive.

The transaction fee is 0.001 BTC at MtGox.  It is near the end of the press release.
https://www.mtgox.com/press_release_20131120.html (https://www.mtgox.com/press_release_20131120.html)

Then ask MtGox why they are ripping you off charging 20x what is necessary.  Then look at how much they are actually paying.   MtGox ripping customers off is nothing new it also has nothing to do with Bitcoin.

So what might be a good solution to this?  ???