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Author Topic: Who pays transaction fees  (Read 5885 times)
jhansen858
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June 11, 2011, 06:29:09 AM
 #21

It was sent from my own client

The fee was not optional, it just wouldn't send it with out it.

I download it from http://bitcoin.bluematt.me/bitcoin-nightly/ubuntu-11.04/ because the regular client will not display on newest ubuntu.

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MoonShadow
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June 11, 2011, 06:32:48 AM
 #22

It was sent from my own client

The fee was not optional, it just wouldn't send it with out it.

I download it from http://bitcoin.bluematt.me/bitcoin-nightly/ubuntu-11.04/ because the regular client will not display on newest ubuntu.

I don't know, then.  Either it's a fee schedule imposed by the creator of that client fork, or you had a massive number of inputs.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
jhansen858
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June 11, 2011, 06:41:02 AM
 #23

well i was mining on an old shitting video card where i would get like 0.05 / day  so that represented a few weeks of daily 0.05 /day payments.

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June 11, 2011, 06:59:38 AM
 #24

well i was mining on an old shitting video card where i would get like 0.05 / day  so that represented a few weeks of daily 0.05 /day payments.

No, that would mean that you had about ten inputs for each transaction.  That shouldn't be enough to throw you into the 'large transaction' rule.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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June 11, 2011, 07:54:27 AM
 #25

The fee will go down. It's left over from when .01 was trivial to block spam. For some reason the drop needed to be phased in.

Remember that there is no Bitcoin company and you are free to get software that communicates with others any way you can. Eventually people will be commissioning custom clients I'm sure.

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June 12, 2011, 02:35:02 AM
 #26

Hardcoded fees in the official client is a very bad idea.  In my opinion, the official bitcoin.org client needs to be updated ASAP to get rid of the .01 fee.  It is probably disincentivizing potential adopters.  Here are some things to consider:

* If somebody wants to DDOS the network, they aren't going to be stopped by a CLIENT-SIDE safety like this.  The fee punishes legitimate users and does NOT offer any real additional security.

* If anti-spam client-side safety IS going to be put in, it should simply be in the form of the client refusing to send more than X number of transactions per minute.  This, too, can be ignored by a determined attacker, of course...

* All the pro-bitcoin literature heavily emphasizes the way bitcoins can be broken down to 8 decimal places.  This is totally contradicted by a .01 hardcoded fee.  Sure, the fee will go down, you say...  but the damage is done, people trying the client TODAY are going to be thinking "WTF"

* What is the first thing someone wants to do when they get their first coins?  Give the currency a test drive!  Send .01 bitcoin to a friend or to yourself, just to see how things work.  Having an unexpected fee pop up at this particular time is simply a public-relations catastrophe.

* .01 is absolutely arbitrary.  What, did Satoshi do some multivariable calculus to find the optimal fee and it just HAPPENED to be a power of 10?  Yeah, right.  People see this arbitrary "magic" number and it costs the currency precious legitimacy.

In conclusion:  the automatic hardcoded fees need to be removed with high priority.  They are detrimental to the currency's uptake.  Lowering from .01 hardcoded to .005 hardcoded is a bandaid fix which does not really address the problem.  We need to go back to the earlier behavior of letting the user choose their own optional fee.
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June 12, 2011, 03:04:39 AM
 #27

Thanks for volunteering.  Keep us abreast on your progress.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
bitcoinminer
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June 12, 2011, 03:05:58 AM
 #28

Thanks for volunteering.  Keep us abreast on your progress.

double plus good

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June 12, 2011, 03:06:11 AM
 #29

just wait after 100 confirmations

Rob P.
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June 12, 2011, 04:00:51 PM
 #30

In conclusion:  the automatic hardcoded fees need to be removed with high priority.  They are detrimental to the currency's uptake.  Lowering from .01 hardcoded to .005 hardcoded is a bandaid fix which does not really address the problem.  We need to go back to the earlier behavior of letting the user choose their own optional fee.

I actually think removing all the transaction fees in the client is a bad idea for consumers.  Here's the reason:

If the fee isn't hard coded into the client, then the consumer using the client will probably set it to 0 not understanding how Bitcoins really works.  Those transaction fees are paid to the miners in the block that they are confirming.  Transactions with higher fees are given priority for confirmation over transactions without fees.  So, if the average consumer sets their transaction fee to 0, their transaction will have low priority to be confirmed, they will wait and wait for their transaction to be confirmed and get frustrated with Bitcoins as a result.

Hardcoding the fee allows for those new consumers to actually be handled with some expediency, thus giving them a more positive outcome.

Everyone agrees the fee needed to be lowered when Bitcoins were $30.  Now they're back to $10 again, do we raise it again?  (Obviously not)  We just let the fee be hardcoded at the new 0.005 rate and see how it stabilizes. 

You don't get stability from making lots of changes in a short period of time.

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lemonginger
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June 12, 2011, 07:21:49 PM
 #31

It could be made a choice (if sender sends without a tx fee, the receiver gets a notice that says you have been sent money from XXX, would you like to add a transaction fee to speed processing?)

It shouldn't be a pop up. Pop ups are annoying and scary and the current wording is confusing. What do you mean i can't send this transaction? If Transaction fee is hard coded, should just show up as transaction fee without ability to adjust it. So the client shows you are sending foo, the fee is bar, total money deducted from your account foo-bar.

Why wouldn't the transaction fee be dependent on amount sent to at least some extent? As mentioned transaction fees offer significant friction for small transactions. It could be a combination of percentage + minimum. If transaction is under XXX and use is not spamming, transaction is free, otherwise it is XXX or the greater of .05%.
ctoon6
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June 13, 2011, 03:05:16 AM
 #32

Actually, fees should not be required, after a while when mining becomes less profitable, less people will mine, thus it becomes cheaper and easier to mine, so once all 21m coins have been distributed, you could just have the client make blocks for free.

So mining would not need to be done by a gpu because there would be no point, and the fee instead of Ƀ is cpu cycles.

Rob P.
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June 13, 2011, 01:44:36 PM
 #33

It was sent from my own client

The fee was not optional, it just wouldn't send it with out it.

I download it from http://bitcoin.bluematt.me/bitcoin-nightly/ubuntu-11.04/ because the regular client will not display on newest ubuntu.

I don't know, then.  Either it's a fee schedule imposed by the creator of that client fork, or you had a massive number of inputs.

Transaction fees are imposed for two reasons:
1)  The "age" of the inputs being used
2)  The amount being sent

Had you just received these funds into an address and then immediately turned around to send them to another address?  Then that requires a fee, especially if the amount is "small".

The mainline code had the minimum transaction fee set to 0.0005 on June 5th:
https://github.com/bitcoin/bitcoin/commit/352b4ea5b924412f3485290123fdf538cfdd8aa8

From Gavin on Transaction fee charges:
https://github.com/bitcoin/bitcoin/issues/170
Quote
Low-priority transactions (where priority is determined by bitcoin amount and age of the inputs) require a fee. You sent a very-small (0.03 BTC) transaction that came from a few-hours-old transaction.

That is by design, to discourage sending lots of very-small transactions (also known as "penny flooding").

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MoonShadow
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June 13, 2011, 04:11:26 PM
 #34

It was sent from my own client

The fee was not optional, it just wouldn't send it with out it.

I download it from http://bitcoin.bluematt.me/bitcoin-nightly/ubuntu-11.04/ because the regular client will not display on newest ubuntu.

I don't know, then.  Either it's a fee schedule imposed by the creator of that client fork, or you had a massive number of inputs.

Transaction fees are imposed for two reasons:
1)  The "age" of the inputs being used
2)  The amount being sent

Had you just received these funds into an address and then immediately turned around to send them to another address?  Then that requires a fee, especially if the amount is "small".

The mainline code had the minimum transaction fee set to 0.0005 on June 5th:
https://github.com/bitcoin/bitcoin/commit/352b4ea5b924412f3485290123fdf538cfdd8aa8

From Gavin on Transaction fee charges:
https://github.com/bitcoin/bitcoin/issues/170
Quote
Low-priority transactions (where priority is determined by bitcoin amount and age of the inputs) require a fee. You sent a very-small (0.03 BTC) transaction that came from a few-hours-old transaction.

That is by design, to discourage sending lots of very-small transactions (also known as "penny flooding").

This is true, but some of the expected fees are 'soft', and should not force the sender to include them.  If the fee is not paid on a low priority transaction, then the transaction is simply ignored by the miners until it's old enough that it's priority is above the minimum.  I've done this many times when not under time pressure.  This fee must be required by his client for some reason.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
Rob P.
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June 13, 2011, 05:18:41 PM
 #35

This is true, but some of the expected fees are 'soft', and should not force the sender to include them.  If the fee is not paid on a low priority transaction, then the transaction is simply ignored by the miners until it's old enough that it's priority is above the minimum.  I've done this many times when not under time pressure.  This fee must be required by his client for some reason.

Again, the main bitcoin.org client imposes a transaction fee (currently 0.0005 BTC) based on the type of transaction (see above).  You can recompile the code to make your version of the client have zero fee, if you choose (your milage may vary).

Change, in main.h:
Code:
static const int64 MIN_TX_FEE = 50000;

To:
Code:
static const int64 MIN_TX_FEE = 0;

The reason is improved acceptance of the client / concept of Bitcoins, not because it's required.  If you don't want to include a fee on a transaction and you're willing to wait, then use a client that doesn't enforce a fee. 

My current version of the official client (under OSX) will allow me to set the transaction fee to 0.00.  However, I believe if I tried to turn-around and send coins I had just received, and was sending a sufficiently small amount, it would deny the transaction without the fee (though I haven't tested this).  Another client may accept it.

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djproject
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June 14, 2011, 12:39:16 AM
 #36

This is true, but some of the expected fees are 'soft', and should not force the sender to include them.  If the fee is not paid on a low priority transaction, then the transaction is simply ignored by the miners until it's old enough that it's priority is above the minimum.  I've done this many times when not under time pressure.  This fee must be required by his client for some reason.

Again, the main bitcoin.org client imposes a transaction fee (currently 0.0005 BTC) based on the type of transaction (see above).  You can recompile the code to make your version of the client have zero fee, if you choose (your milage may vary).

Change, in main.h:
Code:
static const int64 MIN_TX_FEE = 50000;

To:
Code:
static const int64 MIN_TX_FEE = 0;

The reason is improved acceptance of the client / concept of Bitcoins, not because it's required.  If you don't want to include a fee on a transaction and you're willing to wait, then use a client that doesn't enforce a fee. 

My current version of the official client (under OSX) will allow me to set the transaction fee to 0.00.  However, I believe if I tried to turn-around and send coins I had just received, and was sending a sufficiently small amount, it would deny the transaction without the fee (though I haven't tested this).  Another client may accept it.

I want to point out that by having this option available through re-compiling, but not through an options menu, we are effectively placing an unfair tax on users who do not have the skill (or desire) to mess with source code.

If we want Bitcoin to catch on, we can't afford something like this.
bitcoinminer
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June 14, 2011, 01:54:10 AM
 #37

This is true, but some of the expected fees are 'soft', and should not force the sender to include them.  If the fee is not paid on a low priority transaction, then the transaction is simply ignored by the miners until it's old enough that it's priority is above the minimum.  I've done this many times when not under time pressure.  This fee must be required by his client for some reason.

Again, the main bitcoin.org client imposes a transaction fee (currently 0.0005 BTC) based on the type of transaction (see above).  You can recompile the code to make your version of the client have zero fee, if you choose (your milage may vary).

Change, in main.h:
Code:
static const int64 MIN_TX_FEE = 50000;

To:
Code:
static const int64 MIN_TX_FEE = 0;

The reason is improved acceptance of the client / concept of Bitcoins, not because it's required.  If you don't want to include a fee on a transaction and you're willing to wait, then use a client that doesn't enforce a fee. 

My current version of the official client (under OSX) will allow me to set the transaction fee to 0.00.  However, I believe if I tried to turn-around and send coins I had just received, and was sending a sufficiently small amount, it would deny the transaction without the fee (though I haven't tested this).  Another client may accept it.

I want to point out that by having this option available through re-compiling, but not through an options menu, we are effectively placing an unfair tax on users who do not have the skill (or desire) to mess with source code.

If we want Bitcoin to catch on, we can't afford something like this.

I may be alone in this, but anybody upset about a 20 cent fee on a transaction doesn't interest me in the slightest, either buying from or selling to, with bitcoins.

Be fearful when others are greedy, and greedy when others are fearful.

-Warren Buffett
djproject
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June 14, 2011, 02:03:46 AM
 #38

I may be alone in this, but anybody upset about a 20 cent fee on a transaction doesn't interest me in the slightest, either buying from or selling to, with bitcoins.

So I guess that's it for microtransactions?

Right now U.S. legislation is on the verge of capping credit card transactions fees at an amount effectively lower than 20 cents.  Imagine my face when bitcoin = more expensive than VISA.

You're right, though.  Imagine what a failure bittorrent would have been if they hadn't required 20 cent transaction fees for every download.
bitcoinminer
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June 14, 2011, 02:07:33 AM
 #39

I may be alone in this, but anybody upset about a 20 cent fee on a transaction doesn't interest me in the slightest, either buying from or selling to, with bitcoins.

So I guess that's it for microtransactions?

You're right, though.  Imagine what a failure bittorrent would have been if they hadn't required 20 cent transaction fees for every download.

They're not required.

I haven't used them but once since I started mining, and it was to get coins out quicker.

If they're unable to change the text in the box on the standard bitcoin client (as I was) from "0.01" to "0.00" for the transaction fee, they're idiots.  We have no shortage of idiots in here already.

If they can't do the above, what are they doing getting involved with an electronic cryptocurrency for micro-transactions?

I know you're passionate about this belief of yours that it's mandatory, but it's simply not true.

To re-pose your torrent question, imagine how the music industry would be doing if they had caught on to $0.99 per song instead of $20 for a shitty album with one good song on it 10 years ago...

Be fearful when others are greedy, and greedy when others are fearful.

-Warren Buffett
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June 14, 2011, 02:13:50 AM
 #40

I may be alone in this, but anybody upset about a 20 cent fee on a transaction doesn't interest me in the slightest, either buying from or selling to, with bitcoins.

So I guess that's it for microtransactions?

You're right, though.  Imagine what a failure bittorrent would have been if they hadn't required 20 cent transaction fees for every download.

They're not required.

I haven't used them but once since I started mining, and it was to get coins out quicker.

If they're unable to change the text in the box on the standard bitcoin client (as I was) from "0.01" to "0.00" for the transaction fee, they're idiots.  We have no shortage of idiots in here already.

If they can't do the above, what are they doing getting involved with an electronic cryptocurrency for micro-transactions?

I know you're passionate about this belief of yours that it's mandatory, but it's simply not true.

To re-pose your torrent question, imagine how the music industry would be doing if they had caught on to $0.99 per song instead of $20 for a shitty album with one good song on it 10 years ago...

Ahh, I see, it is a friendly misunderstanding.

In the latest version of the standard Bitcoin client (currently downloadable from the frontpage of bitcoin.org), there is no way to disable the transaction fees.  (They apparently only pop up, though, for microtransactions.  Maybe that is why you did not see them)

Now you know.

I hope you will join me in asking the developers to get rid of this mandatory fee.  As a miner, you'll benefit by Bitcoin catching on for more merchants.  It'll catch on for more merchants if there isn't a mandatory fee.  That's most of the appeal of Bitcoin for merchants: escape from credit card/PayPal fees!
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