Transaction fee? WTF?

[Come-from-Beyond]

I have real cash in my pocket and I don't need to pay anything to a 3rd party when give money to someone. Imagine we jumped 20 years ahead and now miners get profit only from transaction fees, so it's useless to send any coins without fee. Usual things become quite complicated and this is a problem for housewives. They don't care about technical issues, they just need to give some "cash" to a son so he could buy a dinner in the school...

Any ways to solve this problem?

[kokojie]

Bitcoin is not cash, it has features that physical cash will never have, so if you desire these features, you pay the fee. If you don't, then you keep using cash. Why do people increasingly use credit/debit cards? even though credit/debit cards has a ton of fees to the user and the merchant? because they desire the features of the card system.

[Graet]

It depends on if you see Bitcoin replacing every other type of currency on the planet
or
a useful currency of the internet

may I ask how many people pay for their kids dinner at school with say PayPal?

[Jan]

Any ways to solve this problem?

Automate fee calculation based on recent blocks.

[davout]

Hosted wallets, account hubs.

In the future I see the blockchain used mainly for inter-bank compensation. Bitcoin will be the foundation for overlay protocols, its raw form wouldn't be used by housewives.

[Jan]

Hosted wallets, account hubs.

In the future I see the blockchain used mainly for inter-bank compensation. Bitcoin will be the foundation for overlay protocols, its raw form wouldn't be used by housewives.

Right.

[unclescrooge]

I have real cash in my pocket and I don't need to pay anything to a 3rd party when give money to someone. Imagine we jumped 20 years ahead and now miners get profit only from transaction fees, so it's useless to send any coins without fee. Usual things become quite complicated and this is a problem for housewives. They don't care about technical issues, they just need to give some "cash" to a son so he could buy a dinner in the school...

I don't see what the problem is? They can't give some "cash" to their son because...?

[DeathAndTaxes]

Not sure how it is a problem.  Mother sends $10.01 (BTC equivelent) to her son and he receives $10.00.  What exactly is the problem?

Still even if you think it is a problem it already is solved: don't pay a transaction fee.

Of course miners may not include it in the next block.  Every miner has the right to choose which tx to include in the next block.  If a single miner on the planet is willing to process your tx for charity well it eventually will be included in a block.

The network has a real cost though something has to pay for it.   You could "hide" the fee by simply never reducing the block reward but that is merely a transfer of wealth via inflation.   While you don't pay a fee your 1 BTC buys less and a miner gets to produce more BTC.

I would point out cash isn't free.  Not for any business.  We pay $0.30 per $100 to process cash.  Businesses which need an armored car service roughly 5x as much.  It is simply a hidden fee.  So while you handing a merchant $1,000 might not result in a $3.00 added to the bill it is included in the cost of doing business and thus prices are ~0.3% higher.

Bitcoin doesn't need to be free (as in free beer not free speech).  It was intended to be free.  It simply needs to be competitive with other options.

[unclescrooge]

Hosted wallets, account hubs.

In the future I see the blockchain used mainly for inter-bank compensation. Bitcoin will be the foundation for overlay protocols, its raw form wouldn't be used by housewives.

That's probably the future indeed. But the best example of a hosted "wallets" is paypal. And you have some fees, that's for sure.

There's no way around it, you'll always have some fees because you'll have to use a third party infrastructure to move your money. Or you use physical cash.

[phatsphere]

I have real cash in my pocket and I don't need to pay anything to a 3rd party when give money to someone.

wrong, printing and minting the paper and coins is quite a part of the expenditures of the country. you might not notice it immediately, but it's there. and since more transactions mean more wear-off, it is somehow measurable.

Usual things become quite complicated and this is a problem for housewives.

you are a sexist.

apart from that, right now, if she wants to send 1 btc to her son, he will get 1 btc. it's just that she will be charged 1.00005.

[Meni Rosenfeld]

Fees for small transactions will probably be about a cent, and there will be ways to make a payment with less than 1 transaction amortized.

apart from that, right now, if she wants to send 1 btc to her son, he will get 1 btc. it's just that she will be charged 1.00005.

1.0005.

[Come-from-Beyond]

I have real cash in my pocket and I don't need to pay anything to a 3rd party when give money to someone. Imagine we jumped 20 years ahead and now miners get profit only from transaction fees, so it's useless to send any coins without fee. Usual things become quite complicated and this is a problem for housewives. They don't care about technical issues, they just need to give some "cash" to a son so he could buy a dinner in the school...

I don't see what the problem is? They can't give some "cash" to their son because...?

Because they have 10 BTC and need 8 BTC for spa-massage and makeup. Should they give just 1.9 BTC not 2 BTC for dinner? Ok. Wait! To pay for the massage and makeup... it's necessary to have 8.1 BTC.. But what if massage and makeup r payed separately, then it's 8.2 BTC... Hey, I need a computer!

[nayrB16]

Instead of transferring bitcoins to their address and waiting for however many confirmations, just keep a second pre-funded address at hand and send him the private keys to said address.

[Come-from-Beyond]

Instead of transferring bitcoins to their address and waiting for however many confirmations, just keep a second pre-funded address at hand and send him the private keys to said address.

Aye! Let's split all bitcoins to 0.0001 BTC chunks and transfer only keys! Need 4.95 BTC? Here r ur 4'950'000 key pairs!

[kangasbros]

You are free to use paper money which can be printed in unlimited capabilities by anyone who has enough skills and resources...

[Come-from-Beyond]

You are free to use paper money which can be printed in unlimited capabilities by anyone who has enough skills and resources...

Thx for advice, but it's not a solution of the problem.

[Pieter Wuille]

I think in the future that even people using the Bitcoin protocol directly will not frequently pay fees.

When paying a merchant, you send the transaction to them, they combine it with a spending a transaction to secure it (which does carry a fee), and broadcast them both on the network. A fee is paid for the original payment, but the customer doesn't see it.

Another solution is a payment protocol which negotiates transactions with the receiver before broadcasting them, allowing the receiver to refund a fee. For example: you want to send 10 BTC somewhere, and you create a transaction that sends 9.9995 BTC to the merchant's address, and 0.0005 as fee. The client software transparently shows it as a 10 BTC transaction, however. This is quite close to how electronic payment systems work now (the receiver pays for the service).

Nonetheless, both solutions above are ways for shifting the fee to the receiver - it doesn't remove it. But that's not really possible in general: Bitcoin is an expensive beast to maintain, and people working to secure it (and maintain it, ideally) need some financial incentive to do so. This is not very different from other currencies, where inflation and taxation can be seen as payment for the service - only it's invisible to the user, as it probably should be in our case as well.

[caveden]

I don't see what the problem is? They can't give some "cash" to their son because...?

Because they have 10 BTC and need 8 BTC for spa-massage and makeup. Should they give just 1.9 BTC not 2 BTC for dinner? Ok. Wait! To pay for the massage and makeup... it's necessary to have 8.1 BTC.. But what if massage and makeup r payed separately, then it's 8.2 BTC... Hey, I need a computer!

You're mixing stuff.

10 BTC is everything she has to spend during the day? An amount that barely pays spa + son's dinner? I doubt. She probably has more, and the amount is probably is not "round", as probably is your bank account balance right now (or do you have an exact power of 10 as money in your bank right now?)
You're thinking on "$10 bills" or other round values like that - which may still be an option, you may print BTC bills.

But if the transaction is electronic, she'll probably have a "not round amount" of coins, will transfer 2 BTC to her son, and keep having a "not round amount" of coins. Where's the problem?

[caveden]

Hosted wallets, account hubs.

In the future I see the blockchain used mainly for inter-bank compensation. Bitcoin will be the foundation for overlay protocols, its raw form wouldn't be used by housewives.

I once thought the same.

But then multi-sig came by, with all its advantages. Costumers having a part of the key while the "bank" has the other is a much more safe architecture than "bank controls all".

It's safe for the costumers, because they don't lose their money even if their keys are stolen - as long as the thief doesn't manage to authenticate himself as the costumer, a strong authentication mechanism is still essential.
It's safer for the bank, as a hack of its wallet is not enough to spend the money. It's also safer to the banker (his meatspace self), since thugs will have no incentive to force him to give them "all the money", as the banker himself cannot do it.

Multi-sig is better in many ways. But with such architecture, I don't see how can you share addresses with other costumers of the same bank.

[Boussac]

Hosted wallets, account hubs.

In the future I see the blockchain used mainly for inter-bank compensation. Bitcoin will be the foundation for overlay protocols, its raw form wouldn't be used by housewives.

That's probably the future indeed. But the best example of a hosted "wallets" is paypal.

I would not compare a hosted bitcoin wallet and paypal.
Paypal is NOT interoperable with other wallets. That's why all "paypal-like" wallets, based on proprietary solutions, are doomed.
Only paypal has had enough market traction through ebay to pull it off.
Today, an internet payment solution must be interoperable and open source.
Bitcoin e-wallets are going to be the optimal solutions for non-tech savy users.