Transaction fees

[kano]

... and it is averaging under 0.2 BTC of fees per block.

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[Mikestang]

Is it possible to mine just for the fees?

Consider this as well: once all the 21 million bitcoins are distributed, there won't be any coinbase in the new blocks and at that point, the miners will indeed be mining only for the fees.

I am beginning to understand it. So during mining the transactions will be piling up then when a block is found the pool operator decides to add to the block.

OK, I am going to start my own pool. Which is the best pool software?

Hmm ... think of it this way:

OMG I can start a small airline and make millions in profit each year.

... and yet almost no one seems to do that ... I wonder why

Ah, but I do have the planes. (Have my own servers in a reputable hosting centre and spare rack space).

OK, what else do I need? Go on, tell me -- best pool software is...

Since you didn't even understand how tx fees are handled I'll go out on a limb and say you do not know enough to run your own pool.  No one is going to hold your hand with that one.

[rasgbonyo]

Is it possible to mine just for the fees?

Consider this as well: once all the 21 million bitcoins are distributed, there won't be any coinbase in the new blocks and at that point, the miners will indeed be mining only for the fees.

I am beginning to understand it. So during mining the transactions will be piling up then when a block is found the pool operator decides to add to the block.

OK, I am going to start my own pool. Which is the best pool software?

Hmm ... think of it this way:

OMG I can start a small airline and make millions in profit each year.

... and yet almost no one seems to do that ... I wonder why

Ah, but I do have the planes. (Have my own servers in a reputable hosting centre and spare rack space).

OK, what else do I need? Go on, tell me -- best pool software is...

Since you didn't even understand how tx fees are handled I'll go out on a limb and say you do not know enough to run your own pool.  No one is going to hold your hand with that one.

Let me chop down your limb QUICKLY.

I can do it.

BTW - did you, newbie that you are, know that you are running my code on whatever OS you are using? You cant hold my hand..

[redsn0w]

fees in 2014 : 0,0001 BTC
fees in 2015 : 0,00001 BTC


what is the problem ... ?
ask at the bank to have the same level of depreciate service cost to ... view what they answer ... 

Fees in 2010 : 0  BTC
Fees in 2011 : 0  BTC
Fees in 2012 : 0  BTC



bitcoin is still better than a bank, the unique problem is the fluctuation of the price. I really want to see what will happen when the block reward will be less than the total block fee (around 2030 we will have less than 1 bitcoin as reward....  can you imagine what will it happen?).

[rasgbonyo]

I see. So that transaction fee is added on to a block which contains 25 Bitcoins already to make it 25.95 BTC. So unless that block is mined your transaction is not "approved" ?

Sort of... let me try to explain it a bit more clearly.

People are constantly creating transactions to move coins around.  These transactions contain inputs and outputs.  The inputs are what you as the sender are combining together to come up with the desired amount of coin you wish to send.  The outputs are the receiver(s) of those coins and change addresses.  The difference between the inputs and the outputs are the fees.

Using my example above, I had two inputs, each of 1BTC and only one output for 1.05BTC.  Because there was 0.95BTC leftover, that becomes what we refer to as the fee.

Now, pools - and individual miners if they're going at it solo - are taking some number of those transactions, and attempting to find a hash that satisfies the network difficulty, so that those transactions can be added to the public ledger known as the blockchain.  When a miner is successful in doing so, a new block is created and added to the chain.  The reward for creating that new block is the generation of 25 brand new coins.  Additionally, because there is a difference between the inputs and outputs (in our example, 0.95BTC), that is also awarded as part of that transaction which creates the 25BTC.  So, assuming our transaction was the only one included in a block, the end result you would see by looking at the blockchain is a block with TWO transactions.  The first transaction is the 25.95BTC of generated coins, the second is our transaction sending 1.05BTC.

There really is no "approval" here, but rather "confirmation".  Your transaction, once it gets included into a block becomes confirmed.  Those 25.95BTC are referred to as generated coins and you must wait 101 confirmations before they become spendable coin.

Make sense?

Yep.

[rasgbonyo]

Is it possible to mine just for the fees?

Consider this as well: once all the 21 million bitcoins are distributed, there won't be any coinbase in the new blocks and at that point, the miners will indeed be mining only for the fees.

I am beginning to understand it. So during mining the transactions will be piling up then when a block is found the pool operator decides to add to the block.

OK, I am going to start my own pool. Which is the best pool software?

It's not about "deciding" to add a block.  If you're mining, you are in a race with many other people to "add a block".  This answer has more detail:

The transaction fees are calculated by the pool when they decide to add the transactions into a block they are trying to mine. The fees are not specified by a number tagged on to a transaction. It is actually the difference between the inputs and outputs, the unused amount of the inputs.

So the fees are in there when you find a block.  As the mining computer (or pool), you get to keep the difference between inputs and outputs in the transactions which are in the block.  You can make decisions about which transactions to try to include in the block as you go looking for a block and receiving transaction broadcasts on the network.

About starting your own pool, you're going to be in tough competition.  Since you're just learning the very basics here right now, it's doubtful that you're ready to compete with the big players out there.  But nice enthusiasm tho!

I installed a pool for myself. I was wondering if it made sense to bother adding bitcoin. I use it to solo mine alt currencies after I got shanked by a pool operator. When I mine bitcoin I do use a "public" pool.

I really wonder why everyone thinks someone is learning basics. Everyone has other skills and might not have got on the crypto currency bus because they were busy sending a man to Mars or something exotic. The person might come in late a then leave us behind or even set standards that we will follow and applaud. Its just like arriving late at the party and pulling the best broad.

I wont be a "public" pool operator, not because of the competition but rather because I do something else in the "real world" but I quite like the idea.

Hey, what about me launching my own currency? Will you mine it?

[kano]

That just means this thread doesn't belong here in this part of the forum ...

[DrHaribo]

To run a mining pool you should be a full-stack developer, bitcoin-expert and security-expert. You'll need to run the business side of things as well. And you have to do public relations and customer support, etc. It's quite a wide skill set. Easier to do with a team than a single person.

You should be willing to work very hard, putting in a crazy amount of hours.

You must have your services monitored and be ready to wake up in the middle of the night from a screaming alarm if your systems go down or become unstable. Then rush to fix things. Usually problems will occur at the worst times, whether it's Murphy's Law or because someone decides that the time from christmas eve till new year's eve is the best time to conduct heavy DDoS attacks against you.

The moment you launch a pool you have made a whole new group of enemies. DDoS attacks will be frequent and hacking attacks will be constant. It is unlikely that you will ever learn who any of these people are. But you can be sure they'll make a major effort to hurt you every single day.

Any little bug or security vulnerability can have disastrous consequences. You'll see other bitcoin services go down in flames. Watch their users plot how to get their money back, or just plain revenge.

Being a pool operator means walking a fine line between failure and insanity.

Hey, what about me launching my own currency? Will you mine it?

No.

There are hundreds (thousands?) of people doing the same.

They decide they want to have their own coin. Usually it's a plan to create a new coin, premine the hell out of it, then the whole world will start using it "just because" and they will be rich. So they take bitcoin or a bitcoin-clone and rename it. Sometimes the software still says bitcoin in a few places because they're not very good at renaming things. Noone uses the new coin. Then it dies.

The problem is that they are starting at the wrong end. You have to see the other person's point of view. Why would they use your coin instead of bitcoin? What will you offer these people? How will your coin be better for them than bitcoin?

Starting with an idea on how to improve the world and going from there is much easier than starting with the idea that you want to be rich/successful/whatever and then asking yourself how you can accomplish that.

Same thing goes for starting a new mining pool or a new anything.

[kano]

... and I will add.
By all means, go ahead, start a BTC mining pool.
Have fun trying to do that.
... however there are 2 obvious expectations from you posts:
1) You know next to nothing about bitcoin, mining and bitcoin pools and thus you should expect to fail - just try to avoid taking other people's BTC with you when you fail ...
2) As mentioned above, why would anyone mine at your pool? Since your reason given is ... to make you a quick buck (which you wont)