Bitcoin Accounting minus transaction fees.

[DrTron]

Say i'm making a website.

This website hosts online games that players use bitcoins as tokens.

So when a player registers, they get a generated bitcoin address that they can deposit funds into to be able to play the game.

If a player wins, they get a payout back out in bitcoins, the house gets a payout if the player loses.

A referal system would in place that would allow a referrer to get a small percent of players winnings..


The way I had it figured in my head..


Player Makes deposit into their account...
When players play a game, (a game with other player) they deposit their tokens into an "escrow" account until the game ends.
The winner is payed back to his account from the "escrow" account, as well as the house being paid their portion.
The house then transferes small %'s into referral's accounts.

The problem i'm having is.. I dont want the games to be realistically expensive..

So how is it possible to transfer small amount of bitcoins and not have them be absorbed by the transaction fees required to transfer them?

I read somewhere that someone suggested actually starting an "online wallet" that would not require any fees to transfer between other account hosted at the same wallet, but I dont know what kind of impact that would have on the network and weather or not the "miners" would accept the "free" transactions and clear them..

I'm a little stumped........

Anyone able to offer any input?

[DeathAndTaxes]

There are no required fees in Bitcoin except for low priority tx and those which violate the anti-spam rules.*  You can send relatively small amounts as long as the inputs have sufficient age to be considered high priority.  


* Technically these aren't part of the protocol and only imposed by the client however since almost all pools and nodes follow these rules creating tx which don't follow them even if possible can result coins delays days or even weeks until someone mines them.

[DrTron]

Do you have a link you would recommend me reading on how the actual TX fee system works?

I have seen several posts about people talking about how the TX fee can be waved but it always seems to be a "when the moon and stars come into alignment" type scenario you're eligible for fee free processing.

I have yet to find an actual set in stone set of numbers that i can program into php to make the system work.

[DeathAndTaxes]

Most tx don't pay a fee (and probably some of those paying a fee, don't have to pay a fee), just take a look at the blockchain.  Not sure where you get the idea it is a rare thing.  The rules for mandatory fees (which are not intended for revenue and exist solely to protect the network from denial of service and spam attacks) can be found here:
https://en.bitcoin.it/wiki/Transaction_fees

If a tx is high priority it doesn't have to pay a fee.  The link has the exact formula but a rule of thumb is "one bitcoin day".  If the input(s) for a tx are 1 bitcoin day (i.e. 1 bitcoin received 1 day ago) or larger then the tx is 'high priority' and no fee is required.  

Note: the determination for priority is based on INPUT not OUTPUT.   You can pay 0.01 BTC with an input that is 1 bitcoin day old and still be considered high priority and thus no fee required.

[bumbo]

Only deposits and withdrawals should be done on the blockchain. Whatever people bet on a game or what percentage referrals get should be done by internal accounting in your script and not with actual bitcoin transactions.

[DrTron]

hm.. Thats what i was thinking too.. although its gonna mean alot more complex php script.. as it'll have to keep track of all account number balances then pick and choose from them to complete payouts...

[bumbo]

It's not that complex to do...

- Verify deposits and add them to internal transaction table
- Send all deposits to main wallet
- Dump all internal transactions into the table
- Select all transactions of user to get account balance
- Authorize withdrawals <= account balance from main wallet

IMHO this is easier and faster than using bitcoin transactions and it puts less clutter into the blockchain. You may want to consider a service like coinbin for integration.

Generally bitcoin shouldn't be used to outsource internal accounting, you wouldn't use Paypal for that either. Not because of the fees and complexity of Paypal IPNs, but because it's the wrong approach altogether.