The minimum transfer fee is not trivial anymore

[GCInc.]

Bitcoin adherents once advertised transfer of value "for free or trivial fee". This is no longer the case. The higher USD rates and standard Bitcoin transfer fee amounts make the minimum fee about 5 US cents. It makes micropayments effectually nonfeasible, and for a transfer as high as $0.50 that's 10% overhead, which is hefty.

Certainly that's far lower than Paypal minimums for instance, but average 1% per transaction for ordinary amounts above micro level is nothing to sneeze at.

Do the transaction fees currently offer significant addition to miners' incentive? If not, with the rising profits already from finding blocks, could they consider collectively lowering the standard minimum fee for the benefit of the network, even better adoption rates (if it needs any in the current crazy momentum )? Would this become a more potential option when the block size is increased (because of transaction rate requirements -> miner profits)? The perfect fee amount for equilibrium of expansion rate vs. fee income is high science, and needs to be found by trial and error.

[1714255682]

1714255682

[cbeast]

You are not required to pay any fee. It is up to miners to set the fee they will accept. I would think that competition for the fees will lower the minimal fee.

[infested999]

If I change my transaction fee to 0 in my client right now, how reliable would it be?

[GCInc.]

You are not required to pay any fee.

Sorry but that claim has proved to be hypocrisy. Nobody wants their transactions delayed by indefinite amount of time, possibly stuck in limbo. Knowing that, everyone who wants to transact successfully must include the minimum fee.

[thebaron]

Instawallet (.01 BTC) and BTC-E (.1 BTC) need to fix the whole minimum withdrawal thing too.

[qxzn]

It's true, the minimum transfer fee is no longer peanuts. I think this is here to stay. Check out this thread:

https://bitcointalk.org/index.php?topic=140233.msg1503129#msg1503129

Basically, they're saying that as the block sizes continue to increase due to increased transaction volume, there's going to be a sort of "market"  for getting your transaction accepted. If your fee isn't high enough, miners won't accept it. It's anyone's guess as to what the market-clearing value will be once this change hits home, and it will undoubtedly change over time.

It could be viewed as a good thing; ensuring that major blockchain users like satoshidice pay for their share of transactions. It also (in my view) leaves space for an alt-chain to step up as a leading space for micropayments; though said alt-chain would need to demonstrate that they won't run into the same problem as soon as e.g. sdice starts using them.

[TsuyokuNaritai]

You are not required to pay any fee. It is up to miners to set the fee they will accept.

Hmm...  if the fees were explicitly in USD, everyone would be screaming it's a cartel between mining pools requiring higher and higher fees. And unlike a 51% attack, such a thing wouldn't be harmful enough to bitcoin to cripple mining's future profits. Thoughts?

Sorry if this is a clueless newbie question.

[Peter Todd]

Basically, they're saying that as the block sizes continue to increase due to increased transaction volume, there's going to be a sort of "market"  for getting your transaction accepted. If your fee isn't high enough, miners won't accept it. It's anyone's guess as to what the market-clearing value will be once this change hits home, and it will undoubtedly change over time.

Incidentally making the market for limited blockchain space more visible to users is fairly high on the developers priority list. Basically that includes tools to determine how much of a fee the user needs to pay to get their transaction confirmed in a given time as well as ways to change their mind and resubmit transactions to increase the fees attached to a transaction if required.

[GCInc.]

 if the fees were explicitly in USD, everyone would be screaming it's a cartel between mining pools requiring higher and higher fees

Yes, I was implying that with the discreet suggestions for improvement before the yelling turns up...

as well as ways to change their mind and resubmit transactions to increase the fees attached to a transaction

That is no fluent way of making transactions. It is blackmailing people who need to transfer value, like the banks do nowadays.

[infested999]

Can anyone do an experiment right now where you send with a .0005 fee, then with a .0004 fee, and so on until .0000 and see if how long it takes for each transaction to go through.

[Stephen Gornick]

It makes micropayments effectually nonfeasible

Correct (mostly), if "microtransactions" is a transaction in the amount of a couple dollars or less.

A decentralized, proof-of-work based cryptocurrency is a very expensive network to maintain compared to a centralized system with a single "master node" / authoritative source.

With Bitcoin, each transaction (and microtransaction) gets transmitted to and stored on tens of thousands of nodes around the world.  Fees are the mechanism to regulate how much bandwidth and storage will be needed to operate a node.  

These fees do make business models that rely on microtransactions crossing the blockchain to become unfeasible.  There are remedies however.  Services that require microtransactions (e.g., online wagering, gaming, media consumption, etc.) can still use bitcoin units internally and then employ accounts so that the only blockchain transactions are deposits and withdrawals.   Most online wagering sites that use bitcoins already work in this manner and it seems to not be an undue burden.

Wallets with BTC redeemable codes are one way to move "off the blockchain".  Because these wallet services are centralized, these "redeemable codes" (electronic tokens) can be offered at a much lesser expense making it possible for a wallet operator to allow bitcoin-denominated microtransactions to be available without charging a fee.

[qxzn]

Does anyone know how transaction fee cost-creep has been affecting SatoshiDice in recent weeks/days?

[GCInc.]

Thanks Gornick - however that doesn't answer our concerns of the miners using their authoritative position to squeeze an unhealthy fee out of the users. Unhealthy as from the viewpoint of the community coherence and project progress.

Oh well, I'd better be asking this from the miners' association, if there ever was one...

[rme]

I changed my fee to 0.00001 BTC, only 1hour to get confirmated 

[Mike Hearn]

Miners are free to tweak their fee rules whenever they want. The real issue is the fixed anti dos rules. There should probably be a signed alert style message to update those outside of the regular release cycles.

[GCInc.]

The real issue is the fixed anti dos rules.

Where can we discuss these rules? A slow and bureaucratic process to lower them is not sufficient having the current situation as an example.

[maqifrnswa]

Can anyone do an experiment right now where you send with a .0005 fee, then with a .0004 fee, and so on until .0000 and see if how long it takes for each transaction to go through.

it's a little more complicated than that since miners might be looking at fees per kilobyte of data with some minimum thresholds for bitcoin-age.

Code:

How many bytes of the block should be dedicated to high-priority transactions,                                                                                                 
included regardless of the fees they pay                                                                                                                                 
blockprioritysize=27000

Minimum block size you want to create; block will be filled with free transactions                                                                                       
until there are no more or the block reaches this size:                                                                                                                  
blockminsize=0

Fee-per-kilobyte amount (in BTC) considered the same as "free"                                                                                                                    
Be careful setting this: if you set it to zero then                                                                                                                      
a transaction spammer can cheaply fill blocks using                                                                                                                      
1-satoshi-fee transactions. It should be set above the real                                                                                                              
cost to you of processing a transaction.                                                                                                                                 
mintxfee=0.0005

Not as complete as what you're looking for, but:
http://bitcoinstats.org/

[DeathAndTaxes]

The real issue is the fixed anti dos rules.

Where can we discuss these rules? A slow and bureaucratic process to lower them is not sufficient having the current situation as an example.

You can discuss them right here.  The rules are here:
https://en.bitcoin.it/wiki/Transaction_fees

Understand the purpose of the anti-spam/DOS fees are not to generate revenue, they generate a trivial amount of revenue.  The purpose is to protect an attacker with a modest of amount of funds (say $100,000) causing massive economic damage to the project by spamming nodes, and bloating the blockchain.  Bitcoin is somewhat unique in that everyone pays the "cost" of all tx (in the form of storage, bandwidth, CPU, etc).  The fee is designed to prevent someone from maliciously exploiting that characteristic.

It gets confusing but there are essentially two fees:
a) min mandatory fee (aka anti-spam, anti-DOS fee) paid ONLY on low priority tx
AND
b) the optional fee paid on any tx for faster confirmations

[zvs]

I changed my fee to 0.00001 BTC, only 1hour to get confirmated 

0.00001?  that's strange, i think very few nodes would relay that

you can change in the source code the cost of creation from .0005 to .0001 and it will be confirmed within a few blocks most likely.    0.0001 is the minimum relay fee, 0.0005 is the minimum creation fee.   0.0001 is 9/10ths of a cent

[tvbcof]

Has anyone had ideas about if/how a user could choose a particular miner, or basically somehow influence transactions to go to a particular pool with a statistically relevant preference?

The reason I ask is that there really are far fewer mining organizations than I would have hoped to see at this phase of Bitcoin's lifecycle, and few enough so that collusion seems like a distinct possibility under the right set of circumstances.  If the userbase could punish mining organizations who might be discovered to be engaging in collusion or otherwise acting against the best interests of the economy it could be a balancing force.  And possibly a healthy one.