Transaction fees

[Oralmat]

is transaction fee only based on the size of the transaction?

Min Tx fee is 5500

[fred21]

thanks for this very interesting reply from DannyHamilton.

Did you include the cost of mining? is the cost of mining stable or does it increase over time or over difficulty or over else?
because if cost of mining increase, transaction fee will increase, isn't it?

[DannyHamilton]

thanks for this very interesting reply from DannyHamilton.

You're welcome.

Did you include the cost of mining?

No, I did not, because the question I was answering was about fees, not mining costs.

is the cost of mining stable or does it increase over time or over difficulty or over else?

The main components in the cost of mining are:

• The cost to acquire the mining equipment
• The cost to store and maintain the mining equipment
• The cost of electricity to run the mining equipment
• The cost to cool the mining equipment
• The cost to maintain a good internet connection to peers

If any of these costs change, then the cost of mining changes.  For example, if the cost of your electricity increases, then your cost for mining increases.  If you need to replace your equipment, then there are costs to purchase new equipment.

because if cost of mining increase, transaction fee will increase, isn't it?

Probably not.  If the cost of mining increases, then some miners will find it is no longer profitable to mine and will stop mining.  This will increase the revenue that the remaining miners receive. When the remaining miners revenue increases enough to cover the costs of mining, then the remaining miners won't stop anymore and an equilibrium will have been reached.

A miner can't force all the other miners to reject low fees. As long as the revenue can cover the risk of orphaning, and the block isn't full, miners will need to accept the transactions or else their competitors will make higher profits and drive them out of business. So, no matter how high the mining costs are, the choice for the miner is to either confirm every revenue generating transaction or to just shut off their equipment.

[fred21]

Thanks,

the more difficulty increase, the more miner have to use electricity to get the same value as before the increase in difficulty. Thus one can say the mining cost increase with difficulty.

am I wrong?

[aleandromagno]

is transaction fee only based on the size of the transaction?

Min Tx fee is 5500

Min tx fee is 0, but from amount of fee depends on where in queue will be your transaction. In the first instance are carried out transactions with a higher fee.

With fee = 0 you can wait few days or even can come back to wallet like "not realized"

[odolvlobo]

the more difficulty increase, the more miner have to use electricity to get the same value as before the increase in difficulty. Thus one can say the mining cost increase with difficulty.

The cost of mining is the same regardless of the difficulty because the amount of electricity a miner uses doesn't change. The revenue changes with the difficulty. If the difficulty goes up by 10%, then the revenue drops by 10%.

[Amph]

the more difficulty increase, the more miner have to use electricity to get the same value as before the increase in difficulty. Thus one can say the mining cost increase with difficulty.

The cost of mining is the same regardless of the difficulty because the amount of electricity a miner uses doesn't change. The revenue changes with the difficulty. If the difficulty goes up by 10%, then the revenue drops by 10%.

the difficult increase only if there is more revenue, or only if some big miners want to "steal" coins from the other by increasing his hash

because he can still make more profit, so that drop is not for everybody but only for the slowest farm out there