Transaction fees

[BitBoyDonny]

Hey guys, wanted to know whether there is any point in considering a transaction fee to decide which transaction to mine?

[VirosaGITS]

Hey guys, wanted to know whether there is any point in considering a transaction fee to decide which transaction to mine?

If you're asking whether you can pick which transaction to include in a block you mine based on what the fee is per kB, the answer is yes and that is why low TX fee transaction wont get confirmed fast, normally.

[fred21]

Hello VirosaGITS,

Is there a risk that transaction fee won't decrease as BITCOIN get more and more value compare to fiat currencies?

thanks

[VirosaGITS]

Hello VirosaGITS,

Is there a risk that transaction fee won't decrease as BITCOIN get more and more value compare to fiat currencies?

thanks

Yes, the fee per TX would go down if "we" increased the block size. Or up if not as people compete for the same limit size per blocks. I particularly do not see a problem with this however.

Anyhow, the TX fee is more tied to available space than BTC's value.

[philipma1957]

Hello VirosaGITS,

Is there a risk that transaction fee won't decrease as BITCOIN get more and more value compare to fiat currencies?

thanks

Yes, the fee per TX would go down if "we" increased the block size. Or up if not as people compete for the same limit size per blocks. I particularly do not see a problem with this however.

Anyhow, the TX fee is more tied to available space than BTC's value.

To follow up if you have 20 .01 transactions = .20 btc you need a big fee like 0.0005 to .0010. Because the .20 btc is made of 20 small pieces .

If you have 25 coins from a solo block it is made of 1 piece and a fee of .0001 should be okay.

Block size needs to grow we can sit and fight over this but if it never grows btc will not grow.

Simple reasons are would you pay 20 used to send 100 used no you will not.

So transactions are capped as of today.
Now if you can figure a way to compress a transaction so that a 1mb block stays the same size but can hold far more transactions. You would be pretty good dev and maybe people would do that.

[fred21]

Hello VirosaGITS,

Is there a risk that transaction fee won't decrease as BITCOIN get more and more value compare to fiat currencies?

thanks

Yes, the fee per TX would go down if "we" increased the block size. Or up if not as people compete for the same limit size per blocks. I particularly do not see a problem with this however.

Anyhow, the TX fee is more tied to available space than BTC's value.

thanks for your answer.

if I understand well, transaction fees are decided by miners and there is a market place of transaction fee with competition between miners which own blocks.

if a miner decide to set the fee too high, he will not receive transactions in his blocks and will be obliged to lower his fee to get transaction in his block.

So the more transaction there will be, the more competitions there will be between miners and the lower the transaction fee will be. is this right?

It is reasonable to say that the more BTC gets high compare to fiat currencies, the more transaction in BTC there will be.

this is unless miners agree together to set high transaction fee. Is this likely?

[pawel7777]

thanks for your answer.

if I understand well, transaction fees are decided by miners and there is a market place of transaction fee with competition between miners which own blocks.

if a miner decide to set the fee too high, he will not receive transactions in his blocks and will be obliged to lower his fee to get transaction in his block.

So the more transaction there will be, the more competitions there will be between miners and the lower the transaction fee will be. is this right?

It is reasonable to say that the more BTC gets high compare to fiat currencies, the more transaction in BTC there will be.

this is unless miners agree together to set high transaction fee. Is this likely?

You got it a bit backwards. When number of transactions exceeds network capacity, then you have something called "fee market" (don't be confused with 'free market'). In such scenario it's the users (not miners) who compete for their transactions to be processed, miners would just pick txs with highest fees.

That's the general, simplified picture.

[ranochigo]

thanks for your answer.

if I understand well, transaction fees are decided by miners and there is a market place of transaction fee with competition between miners which own blocks.

When the miner hashes the block repeatedly, they have to use the hash of all the transactions that they are planning to include into the block. This is called the merkle root. The coinbase transaction which distributes the Bitcoins is mandatory. The miner then has to hash the transaction to try to meet the target.

During this step, the miner can effectively filter out transactions that they don't like or don't fit their criteria.

if a miner decide to set the fee too high, he will not receive transactions in his blocks and will be obliged to lower his fee to get transaction in his block.

Basically yes. However, if the entire network of miners decides to rise their fees threshold, they can effectively force users to pay a higher fee to get their transaction in a block.

So the more transaction there will be, the more competitions there will be between miners and the lower the transaction fee will be. is this right?

No. The transaction fees would actually rise. Since the maximum amount of transaction that can be included is 1kb, users have to try to add a higher fee to get to the top of the ranking and have a higher chance of getting included in a block.

It is reasonable to say that the more BTC gets high compare to fiat currencies, the more transaction in BTC there will be.

this is unless miners agree together to set high transaction fee. Is this likely?

I'm not sure what you mean by that. Please elaborate.

[RealPhotoshoper]

Hey guys, wanted to know whether there is any point in considering a transaction fee to decide which transaction to mine?

imagine if you will shipping goods,you will put fee in different class,more fee will faster that goods shipped. its also like transacton fee,decide transactions fee by speed,faster transaction will take bigger fees. i think that's the point.

[fred21]

So the more transaction there will be, the more competitions there will be between miners and the lower the transaction fee will be. is this right?

No. The transaction fees would actually rise. Since the maximum amount of transaction that can be included is 1kb, users have to try to add a higher fee to get to the top of the ranking and have a higher chance of getting included in a block.

If transaction fee increases when number of transaction increases in BTC network, this is a big problem for the bitcoin system as this will slow the BTC developpement to be used by "normal people" in their daily spending (which is the ultimate goal). what do you think?

[odolvlobo]

So the more transaction there will be, the more competitions there will be between miners and the lower the transaction fee will be. is this right?

No. The transaction fees would actually rise. Since the maximum amount of transaction that can be included is 1kb, users have to try to add a higher fee to get to the top of the ranking and have a higher chance of getting included in a block.

If transaction fee increases when number of transaction increases in BTC network, this is a big problem for the bitcoin system as this will slow the BTC developpement to be used by "normal people" in their daily spending (which is the ultimate goal). what do you think?

Some people, primarily the 1 MB crowd, don't believe that use of the Bitcoin block chain by normal people in their daily spending is the ultimate goal.

[defcon23]

just have a look at this website:  http://bitcoinfees.21.co/  , That's a good point of start to understand/lurn how transactions fees could be calculate.

[fred21]

Thanks for your replies.

Does anyone can start mining and accepting transaction in his blocks without having solved the mathematical problem which result in earning 25 BTC reward OR do you need to have solved mathematical problem which result in earning 25 BTC reward in order to start accepting BTC transaction as miner?

thanks

[ranochigo]

Thanks for your replies.

Does anyone can start mining and accepting transaction in his blocks without having solved the mathematical problem which result in earning 25 BTC reward OR do you need to have solved mathematical problem which result in earning 25 BTC reward in order to start accepting BTC transaction as miner?

thanks

You can choose to include transactions into a block as long as you get a block hash that is of the correct target. You can include transactions and claim the transaction fees on the first block you mined. The full node on Bitcoin network enforces these rules. Only if the block is of the correct size, target and follows rules, it is considered valid.

If you choose to mine a block that has the incorrect target, nodes would just reject it.

[odolvlobo]

Does anyone can start mining and accepting transaction in his blocks without having solved the mathematical problem which result in earning 25 BTC reward OR do you need to have solved mathematical problem which result in earning 25 BTC reward in order to start accepting BTC transaction as miner?

No. In order to add a block to the block chain you have to be the first to have "solved the mathematical problem".

[defcon23]

Does anyone can start mining and accepting transaction in his blocks without having solved the mathematical problem which result in earning 25 BTC reward OR do you need to have solved mathematical problem which result in earning 25 BTC reward in order to start accepting BTC transaction as miner?

No. In order to add a block to the block chain you have to be the first to have "solved the mathematical problem".

yes , exactly, and that's call the golden nonce 

[fred21]

Thanks for your replies.

Does anyone can start mining and accepting transaction in his blocks without having solved the mathematical problem which result in earning 25 BTC reward OR do you need to have solved mathematical problem which result in earning 25 BTC reward in order to start accepting BTC transaction as miner?

thanks

You can choose to include transactions into a block as long as you get a block hash that is of the correct target. You can include transactions and claim the transaction fees on the first block you mined. The full node on Bitcoin network enforces these rules. Only if the block is of the correct size, target and follows rules, it is considered valid.

If you choose to mine a block that has the incorrect target, nodes would just reject it.

Does this mean that only people that have "solved mathematical problems" (and got block attributed to them as well as 25 BTC reward) can accept transaction into their block and get the transaction fee?

thanks

[ranochigo]

Thanks for your replies.

Does anyone can start mining and accepting transaction in his blocks without having solved the mathematical problem which result in earning 25 BTC reward OR do you need to have solved mathematical problem which result in earning 25 BTC reward in order to start accepting BTC transaction as miner?

thanks

You can choose to include transactions into a block as long as you get a block hash that is of the correct target. You can include transactions and claim the transaction fees on the first block you mined. The full node on Bitcoin network enforces these rules. Only if the block is of the correct size, target and follows rules, it is considered valid.

If you choose to mine a block that has the incorrect target, nodes would just reject it.

Does this mean that only people that have "solved mathematical problems" (and got block attributed to them as well as 25 BTC reward) can accept transaction into their block and get the transaction fee?

thanks

During the part where the user is solving the mathematical problem, the 25BTC is already hashed in the block, together with the transactions. Solving the mathematical problem means that the block must match a specific target for it to be accepted as valid. If the block target is not reached or "the math problem is not solved", nodes would not see it as valid and the coins/transactions would remain non-existent or unconfirmed. It is more of like a lottery but generally, the more hashrates you have, the better chance you would have.

[jrpatking]

Still, I'm just confused to understand your question. All transactions are processed with or without fee. However, the transaction which pays higher fee than the other transactions will be processed first.

[n0ne]

All transactions were made with a minimal fees. I mostly prefer the transaction fees of 0.0002btc. Everytime I too have experienced lot confirmations in a short time.