Why a fixed transaction fee?

[instagibbs]

If it is crazy to send 0.00005 BTC with a 0.0001 BTC fee, then perhaps, bitcoin is not useful for sending such small payments.  I suggest using your local currency (or a credit card, or bank transfer) when you want to send amounts equivalent to 0.00005 BTC (At today's exchange rate, that's $0.028).

Not quite right. Miners can and will mine things with a lower fee. Many nodes will simply not forward the transactions however.

[Gavin Andresen]

Not quite right. Miners can and will mine things with a lower fee. Many nodes will simply not forward the transactions however.

For low-priority transactions, it doesn't look to me like many miners are accepting lower fees.

Right now, a 999-byte transaction paying the reference-implementation-default fee of 0.0001 BTC will wait 2-3 hours to get into a block.

A typical 250-byte transaction paying the default 0.0001 BTC fee will see its first confirmation in 5 or 6 blocks (about an hour on average). If you want your transaction to confirm quickly, then right now you need to pay about double the default fee.

Some results running https://github.com/bitcoin/bitcoin/pull/3959 (more review/testing welcome) :

Code:

$ for i in {1..25}; do ./bitcoin-cli estimatefee $i; done
0.00077821
0.00044643
0.00044444
0.00044248
0.00044248
0.00038911
0.00038760
0.00026810
0.00024752
0.00022831
0.00020040
0.00017513
0.00016155
0.00014706
0.00013802
0.00012531
0.00011779
0.00011013
0.00010363
0.00010111
0.00008905
0.00008636
0.00007474
0.00006743
0.00004444

[Massimo80]

I mailed my friend a nickel and it cost 49 cents in postage!! The postal service should change their fee based on if you have a nickel inside or not.

Best answer so far

Anyway, I didn't want to start a flame... just asking.

Relax, guys...

[instagibbs]

Not quite right. Miners can and will mine things with a lower fee. Many nodes will simply not forward the transactions however.

For low-priority transactions, it doesn't look to me like many miners are accepting lower fees.

Ah. I don't have data, I was just trying to tease apart the idea that a certain fee is required and the txn will be rejected by the network otherwise. It became important recently as the min txn fee for propogation dropped a lot, while miners haven't changed their behavior much wrt what fees they want.

I should probably play around with the new rpc calls; in the end it's an auction, and auctions are fascinating.

[whtchocla7e]

I mailed my friend a nickel and it cost 49 cents in postage!! The postal service should change their fee based on if you have a nickel inside or not.

I gave my friend a nickel in person and it cost me absolutely nothing in postage.

We could exchange the same nickel between us 100 times per minute forever and still have the whole nickel at the end.

Try that with Bitcoin.

[cp1]

I gave my friend a nickel in person and it cost me absolutely nothing in postage.

We could exchange the same nickel between us 100 times per minute forever and still have the whole nickel at the end.

Try that with Bitcoin.

You could hand the private key back and forth and do the same.