Is the block reward not enough for miners?

[owm123]

In a recent reddit posts it was written:

"Greg Maxwell admits the main reason for the block size limit is to force a fee market. Not because of bandwidth, transmission rates, orphaning, but because otherwise transactions would be 'too cheap'."

https://www.reddit.com/r/btc/comments/42hl7g/greg_maxwell_admits_the_main_reason_for_the_block/

This suggest that block reward is not enough, or that miners are too greedy and they want to double dip, i.e., profit from block rewards and from transaction fees.

So how much transaction fees are "too cheap" for miners?

[RealBitcoin]

Nonsense, when the block reward halves, we have a good chance for price doubling, to adjust for demand.

Miners be patient FFS, we are all in this together, dont be too greedy.

[Amph]

current bitcoin transaction fee are in the range of 1/100 of the mining reward, which is 5x their actual consumption in electricity

if we compare this with the future fee era, than yes it's too cheap, because it would mean a loss since it would be 1/20 of the consumption

it should be 20x of what it is now at least, if miners were to earn their profit from fees only...

[MicroGuy]

In a recent reddit posts it was written:

"Greg Maxwell admits the main reason for the block size limit is to force a fee market. Not because of bandwidth, transmission rates, orphaning, but because otherwise transactions would be 'too cheap'."

https://www.reddit.com/r/btc/comments/42hl7g/greg_maxwell_admits_the_main_reason_for_the_block/

This suggest that block reward is not enough, or that miners are too greedy and they want to double dip, i.e., profit from block rewards and from transaction fees.

So how much transaction fees are "too cheap" for miners?

The main reason for not increasing the blocksize is to increase bitcoin's dependence on Blockstream/PWC.

Maxwell is the company's CTO and far far removed from the ability to make objective decisions in the community's best interest. Maxwell is not alone, all of the central core devs are on the payroll.



http://www.bizjournals.com/newyork/news/2016/01/29/pwc-becomes-first-big-four-accounting-firm-to.html

~~

[coins101]

There was a retail director I worked for many years ago.  He spent years analysing all the promotional offers at the major supermarket chain where he was on the board.

One of the most profitable promotions was buy one get one free.  When you give away an extra product, the volume of total sales for that product shoots through the roof. You make a small profit on each sale, but your total sales go up by a large factor giving you more profit overall.

Basically, if you make something dirt cheap, you make more money overall.

This is one of the reasons credit cards are given away freely. Remove or reduce the upfront cost barrier and you end up making more money down the line from a substantially bigger user base.

Somewhere in all this, Bitcoin should be able to carve out a low user cost & high user base proposition to fund the security of the network.

[LiteCoinGuy]

Nonsense, when the block reward halves, we have a good chance for price doubling, to adjust for demand.

Miners be patient FFS, we are all in this together, dont be too greedy.

yes, if the price doubles at every halving there is enough profit even with low fees for a long long time.

[franky1]

There was a retail director I worked for many years ago.  He spent years analysing all the promotional offers at the major supermarket chain where he was on the board.

One of the most profitable promotions was buy one get one free.  When you give away an extra product, the volume of total sales for that product shoots through the roof. You make a small profit on each sale, but your total sales go up by a large factor giving you more profit overall.

Basically, if you make something dirt cheap, you make more money overall.

This is one of the reasons credit cards are given away freely. Remove or reduce the upfront cost barrier and you end up making more money down the line from a substantially bigger user base.

Somewhere in all this, Bitcoin should be able to carve out a low user cost & high user base proposition to fund the security of the network.

in short
cheap transaction fee's = more customers buying bitcoin(due to usability and desire) = higher bitcoin price.
which translates to this:

when the block reward halves, we have a good chance for price doubling, to adjust for demand.

Miners be patient FFS, we are all in this together, dont be too greedy.

if it costs too much for normal people to use. businesses like dell, foodler, overstock wont get much customers using bitcoin. they will drop the bitcoin accepting proposition and less retailers will accept bitcoin. so fee's affect bitcoins usefulness TWICE. 1. for customers wanting to spend, 2. businesses willing to accept.

so bitcoins value will drop, all because of high transaction fees.

bitcoins tx fee was not a income stream and has no need to be an income stream for atleast 2 decades. its only purpose was for transaction spam, to stop things like satoshi dice and nefarious people from circle jerking payments to themselves at no cost.

i agree transaction fee's should not be completely free, otherwise the circle jerkers spamming the mempool will return. but we should not be letting miners charge more than 5cents a transaction as a minimum either.

things need to change. for instance if the transaction has 2 outputs (pay one person and have a change address) that should be a couple pennies at most. but if, for every extra output should be an increase of the price. thus the richer businesses who send out funds to many in one go (batch payments) they end up paying more. because batch payments bloat up the blocks and take more time to process

but blockstreams agenda is the opposite. where the businesses (using liquid or LN) would themselves have cheap transaction fee's, and its the smaller individuals paying the price.

i really wish those involved with programming bitcoin stopped thinking about profittering and just thought about making a great monetary system that does not end up being the equivalent to central banking.

it is becoming more and more obvious the blockstream backers are not in it for a open monetary system for all to use..

[takingthis4]

i think its more or less the same if people are still mining bitcoins and they are not quitting it, i dont think we need any changes

[coinzat]

I do not think that the current fees for transaction are low because it reaches usually $100 dollar or more per block, so miners get good revenue now,
But after halving If the price did not doubled at least, miners will start accepting only high fees transaction , forcing the users to pay more

[franky1]

I do not think that the current fees for transaction are low because it reaches usually $100 dollar or more per block, so miners get good revenue now,
But after halving If the price did not doubled at least, miners will start accepting only high fees transaction , forcing the users to pay more

or..

stop being greedy and hoard the 12.5btc per block and cause a demand rise!!

miners who sell coins at a loss and then cry and try to get subsidized elsewhere are missing the point that they are a factor in how bitcoin as a whole is priced.

imagine it this way. imagine miners jumped to minimal fee of 0.00025 instead of 0.0001 (10cent instead of 4cent right now)

if bitcoins customer usefulness dies because it costs 10cents to move just $2, that kills off people buying domain names.
it kills off people buying the alpaca socks it kills off people buying advertising. it kills off people just getting 1cent from faucets to learn how to use it,
it kills off people wanting to just buy a drink at a bar.

so less people will want to use it.. and demand dies.
secondly retailers like domain websites stop offering domains for bitcoin because customers are not buying domains using bitcoins. retailers and bars stop selling food and drink due to customers not using bitcoins.

future scenario
so the number of merchants accepting bitcoin dies off. again impacting demand.
the price of bitcoin falls, so instead of being $400, its then lets say $200.. where now the tx fee of 0.00025 is now 5 cents.. so miners then push the fee's up to 0.0005 (10cents), they see less transactions due to desire to use declining. so they raise the fee's to 0.001 (20cents)

some dumb corporate shill will say that bitcoin fee's are in theory cheaper than debit card fee's. but that is wrong. bitcoin fees should not even pretend to compete debit card fees or pretend that its acceptable to try matching debit card fee's.. bitcoin is not universally used and so bitcoin needs to be better cheaper and more useful all by itself, if it wants to succeed. bitcoin is no where ready to be market competing dominance to just charge what they like because people are willing to pay.. these narrow minded miners and core devs dont realise bitcoin is not even 1% useful to the world. so it is not yet time to become greedy at the risk of killing off usefulness

the best suggestion is not transaction fee rises. or bottlenecking transactions, or dividing classes of premium paying transactions vs second class transactions.
bitcoin needs to expand to allow more transactions through so its easier to use without hours of delay (10 minutes acceptable settlement time). and needs to be cheap as possible to make people want to use it.

miners have no need to start a fee race for 2 decades. and by starting now they are just shooting themselves in the foot. without thinking long term impact across the community

[busybee7]

its ok most probably right now as the price of the bitcoin is not too low, we dont need to change anything because of that