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Author Topic: Proposed Formula for Future/Present Miner Fees (madebyNoob)  (Read 520 times)
AgentofCoin
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July 08, 2015, 09:59:06 PM
 #1

First, I am not a programmer or mathematician, so please keep this in mind. I am a noob.
The purpose of this is to see how miner's fee are adjusted in relation to the following three factors:
1. Current BTC Price (USD)
2. Average Number of Tx a Day
3. Current Block Award Amount

The Miner's argument seems to be that when the block award is gone (decreases) fees must go up.
But the question I have is: What is the equation or formula to determine a fair future fee?

With all the discussions/arguments/and stress testing, I have not seen anyone propose an equation or formula
that could potentially be used to automate miners fees for now and the future.
Nor has anyone (that I have seen) have provided graphs or explanations as to how these three factors determine future fees.

If the 1MB Cap is raised, then the mempool and unconfirmed status can not be used as measurement to pay a certain miner fee.

Below is a picture of my formula with descriptions.

Here is the link to google spreadsheets: https://docs.google.com/spreadsheets/d/1PKlZu8CuRUt-FItq_X3WzxxPsc8XzEUdSIejF1OwI_c/edit?usp=sharing
In google spreadsheets, you can edit the yellow boxes to change the three factors (inputs) to see different results.

Please discuss and or correct.


Edit: Is this even viable? But if it is not (since I'm not educated in these matters) hopefully this will inspire the experts with other ideas.  Smiley

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unamis76
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July 08, 2015, 10:10:49 PM
 #2

It seems an interesting proposal, although I think BTC/USD rates should not make an impact in the fees paid... Fees are paid to miners, who mine because they ultimately believe in Bitcoin and because of that the rule of "1 Bitcoin = 1 Bitcoin" should be applied here.

When the block reward reaches 0, this formula will probably not be applicable: it's best for the market to simply choose what fee they think it's best and elt the competition go from there... By then I expect the fee calculation algorithm in Bitcoin Core to be quite a bit more advanced, dynamically readjusting according to transactions in the mempool

So there you go... Opinions sent to a noob by someone even more noob! haha Smiley


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BITMIXCOIN
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  ..Anonymous....................
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AgentofCoin
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July 08, 2015, 10:21:07 PM
 #3

It seems an interesting proposal, although I think BTC/USD rates should not make an impact in the fees paid... Fees are paid to miners, who mine because they ultimately believe in Bitcoin and because of that the rule of "1 Bitcoin = 1 Bitcoin" should be applied here.
...
I understand what you are saying and I agree, but my reasoning for adding that is that miners,
I believe, are converting their coins into their own currency, to pay their electric bills and for new equipment.
And as such, they are concerned with current btc prices versus their expenses.
I do not think the miners are thinking along your lines yet. But will one day in the future.

I support a decentralized & unregulatable ledger first, with safe scaling over time.
Request a signed message if you are associating with anyone claiming to be me.
unamis76
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July 08, 2015, 10:30:10 PM
 #4

It seems an interesting proposal, although I think BTC/USD rates should not make an impact in the fees paid... Fees are paid to miners, who mine because they ultimately believe in Bitcoin and because of that the rule of "1 Bitcoin = 1 Bitcoin" should be applied here.
...
I understand what you are saying and I agree, but my reasoning for adding that is that miners,
I believe, are converting their coins into their own currency, to pay their electric bills and for new equipment.
And as such, they are concerned with current btc prices versus their expenses.
I do not think the miners are thinking along your lines yet. But will one day in the future.


I don't think miners are thinking like that right now either, but they can't just be all about profit Wink They've got to show some effort and dedication to the cause... If we have miners focused on quick profit only, and if those miners happen to have a lot of power in the blockchain... I don't even want to think what could they do. From selectively mining transactions to being able to control double spends... it wouldn't be good.

I know they have to pay for electricity, and they can sell whatever coins they need. But we can't also make them feel dependent on our fees... Our fees are just a little help, and incentive, a way of saying thanks. We hope that one day the fee market will be very competitive due to high acceptance of Bitcoin, so there will probably be enough fees to pay miners by then.


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BITMIXCOIN
██
██
██
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██
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██
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██
██
██
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.
  ..Safe................................
  ..Anonymous....................
  ..Insurance against fraud.....
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