Bitcoin Transfer Fees Will Go Up With Time - How Can This Affect BTC Market

[unbeaten]

I have just noticed a problem, I sent 0.0001 to my Electrum wallet. And the minimum transaction fee I was able to set to transfer it out of my wallet is 0.00002. That is 20% of the total sum I was transferring.

If Bitcoin does become mainstream worldwide and MOST* people use it every day. The value of 1x Bitcoin would have to increase 1000 fold. That would make 1BTC worth $600,000.00, and 0.0002 BTC worth $1,200.

If its then costs $1,200 to send 0.0000001 bitcoins that will make Bitcoin unusable?

[Carlton Banks]

If its then costs $1,200 to send 0.0000001 bitcoins that will make Bitcoin unusable?

You're not the first to notice. Payment channels and responsible blocksize increases will play the biggest role in solving that problem. Both are in the works, the latter will take place sooner (sometime in the next few months)

[unbeaten]

Great!

Do you know how it will work once the solutions have been implemented?

Will it be a fixed transaction fee or a percentage?

[BitcoinHodler]

Great!

Do you know how it will work once the solutions have been implemented?

Will it be a fixed transaction fee or a percentage?

What solution are you talking about? Do you have block size in mind?

If so I think increasing the block size can essentially solve part of the problem which is not really a problem since the fee amounts are not that high. But, yeah since there will be more transactions it means more fee.

And also the fees will be always a fixed amount based on the size in bytes and nothing else.

[Carlton Banks]

Great!

Do you know how it will work once the solutions have been implemented?

Will it be a fixed transaction fee or a percentage?

You will choose the fee that you think is right for the urgency of your transactions. The difference will be that the amount of space available will multiply by 2-4x, depending on how many signatures you're using in each tx. So, for instance, if you're sending from 100's of different addresses in one transaction, you'll max out the new structure nicely. And because of the extra space, the expected fees will drop by 2-4x also. This is a more complex way of simply making the space bigger regardless of whether the data is just the tx part or it's signature. It's a compromise between straight blocksize increases and leaving things as they are.

[Carlton Banks]

What solution are you talking about? Do you have block size in mind?

See my post above. Essentially, the blocksize is increasing, but only for tx signatures, not for tx data. Which is fine, as the signatures are at least more than half of the overall size of a transaction anyway.

[franky1]

The value of 1x Bitcoin would have to increase 1000 fold. That would make 1BTC worth $600,000.00, and 0.0002 BTC worth $1,200.

though the quote above is speculative and concentrating more on a orgasmic fiat value the person hopes for..

here is some food for thought

if bitcoin was $600k. then the smallest measure (1sat) would be at cheapest $0.006cent used as a fee and about $0.60 as the minimal acceptable spend on a scenario where there is no bottlenecking and no need to worry about priority because everyone can transact in the very next block.

thus i would hope the sat tx fee decreases as the fiat price increases to counter each other, rather than the fee staying fixed at 0.0002

however in the preferred scenario of a sat tx fee moving down the decimals..
as soon as it starts to get busy. a tx fee becomes 2sat+ (1.2cents+ where an acceptable spend is $1.20+) which would eventually restart another upperclass/underclass debate on who deserves to use bitcoin as a open network with no middlemen, making developing countries treated as "spammers" again

some stupid people think bitcoin works top down(bitcoin make satoshi). and that adding an extra decimal would solve this. but bitcoin works bottom up (satoshi make bitcoin) so adding an extra decimal is the same as turning 21mill bitcoins into 210mill bitcoins
2100000000000000 sats = 21m bitcoin
21000000000000000 sats = 210m bitcoin
which is something that should NEVER be done as it would definitely affect peoples value perception (much like share dilutions/tulip mania)

but this is just speculative 'issues' that are not part of the current worries of today

things for today are the capacity and fee measure decrease to keep bitcoins utility as a no barrier financial tool for anyone to use

[beamforming2]

The transaction fee is  increased for sure.

If btc fees become higher than paypal and bank fees a lot of people might be dissapointed by bitcoin and

sell their btc.This might affect the bitcoin price.
people always choose low fees!

[unbeaten]

The transaction fee is  increased for sure.

If btc fees become higher than paypal and bank fees a lot of people might be dissapointed by bitcoin and

sell their btc.This might affect the bitcoin price.
people always choose low fees!

I don't think its an issue if your sending 1 Bitcoin with transaction fee of 0.0002, its far less than 1% of the total value.

It's the small transactions that hurt. If you send 0.0004 Bitcoins you loose 50%!

[Carlton Banks]

some stupid people think bitcoin works top down(bitcoin make satoshi). and that adding an extra decimal would solve this. but bitcoin works bottom up (satoshi make bitcoin) so adding an extra decimal is the same as turning 21mill bitcoins into 210mill bitcoins
2100000000000000 sats = 21m bitcoin
21000000000000000 sats = 210m bitcoin
which is something that should NEVER be done

What, stupid people like Mike Hearn, king of "on-chain scaling"? Stick to multiplication and addition Franky, it appears as if division is beyond your mathematical prowess, lol. You're starting to sounnd like RawDog

[franky1]

Stick to multiplication and addition Franky, it appears as if division is beyond your mathematical prowess, lol. You're starting to sounnd like RawDog

go play with your monero, because now your starting to sound like a troll again. come back when you have something informative and ontopic to say

[illyiller]

Payment channels are on-chain, just not necessarily in the most immediate block. The transactions are verified by checking their hash has the correct value in reference to the original mining rewards that it's inputs came from, just as they are now. The only difference is delaying the stage where the blockchain itself records where the money moved to. The delay provides an opportunity for patterns in the transaction flows to be aggregated together, meaning that when they are finally written to the blockchain, the space they use is far more efficient.

I like to think of this as "pre-chain", as all the same checks and balances are applied right up to the point where a normal transaction would just get processed in the next available block. And all the verification that happens pre-chain carries more than sufficient security and veracity to maintain Bitcoin's monetary properties.

"Off-chain" implies the blockchain is never involved, which in the case of centralised wallet providers like Coinbase and Xapo is true, those kind of wallets don't give users direct access, and so Coinbase can just adjust their own internal ledger to represent a transaction (verified by humans, not the blockchain...). Payment channels are more like a stratification of how and when transactions are committed to the blockchain.

Fair enough, I think this is a semantic issue. That was never my take on "off-chain". The way I see it, the real addition to scalability that Lightning provides is moving transactions off the blockchain---directly mitigating mainchain throughput not by expanding its capacity, but rather by moving throughput into contracts.

Yes, they are still Bitcoin transactions, but the blockchain is only involved in opening and settling a channel. Everything in between could take place on the blockchain, but it doesn't. Sure, we could call it "pre-chain", but to me that also implies "off-chain".

But like I said, I think this is a semantic thing. I get that hard forkers try to leverage the "off-chain" term to argue that a) the model isn't trustless (false) and b) LN transactions aren't Bitcoin transactions (they are). But the reality is, the reason LN is the answer to scaling is precisely because it scales outside of the Layer 1 protocol --- as opposed to, say, Layer 1 optimizations like Schnorr signatures.

I don't think "off-chain" needs to permanently hold onto the negative connotation of "trust-based/custodial". The issue is trust---not on/off chain---there is a world of difference between "trust-based off-chain" and "trustless off-chain."

[Conus]

I think it will make the market stronger.  Think about it.  Go to a small investor with a $10  idea.  Tell him you can make $.05 for every one of these $10 items you sell.  They have not much interest because they rather invest their money elsewhere and make more money. With the fees going up, there will be more investors interested.

[coinsocieties]

I think it will make the market stronger.  Think about it.  Go to a small investor with a $10  idea.  Tell him you can make $.05 for every one of these $10 items you sell.  They have not much interest because they rather invest their money elsewhere and make more money. With the fees going up, there will be more investors interested.

I do not think this will be the case.  If the fees go up, I would think that these investors would want to back out and not get involved.  Why would you want to just into something where people will be walking away because the fees will be higher.  Now if there is a need to use Bitcoin then this may make a difference, but I do not think investors will flock to Bitcoin in the event that the fees go up.

[franky1]

Fair enough, I think this is a semantic issue. That was never my take on "off-chain". The way I see it, the real addition to scalability that Lightning provides is moving transactions off the blockchain---directly mitigating mainchain throughput not by expanding its capacity, but rather by moving throughput into contracts.

Yes, they are still Bitcoin transactions, but the blockchain is only involved in opening and settling a channel. Everything in between could take place on the blockchain, but it doesn't. Sure, we could call it "pre-chain", but to me that also implies "off-chain".

But like I said, I think this is a semantic thing. I get that hard forkers try to leverage the "off-chain" term to argue that a) the model isn't trustless (false) and b) LN transactions aren't Bitcoin transactions (they are). But the reality is, the reason LN is the answer to scaling is precisely because it scales outside of the Layer 1 protocol --- as opposed to, say, Layer 1 optimizations like Schnorr signatures.

I don't think "off-chain" needs to permanently hold onto the negative connotation of "trust-based/custodial". The issue is trust---not on/off chain---there is a world of difference between "trust-based off-chain" and "trustless off-chain."

the thing you have to ask yourself...

understanding the brilliance of immutable transactions protected by a blockhash(confirm), then protected by the chain of blockhashes and difficulty of retrying hashes as more go ontop (more confirms as more blocks are added)

knowing that lightening doesnt have that immutable hash protection because the transactions are not settled

what is your personal trust level opinion of a single signee zero-confirm transaction (trustless off-chain)
would you consider that as secure as a several confirmed immutable transaction..(onchain)

then having to rely on a multisig contract between multiple users (trust-based)
would you consider that as secure as a single signee zero-confirm (trustless off-chain)
would you consider that as secure as a several confirmed immutable transaction..(onchain)

[Carlton Banks]

The issue is trust---not on/off chain---there is a world of difference between "trust-based off-chain" and "trustless off-chain."

Well, that's why using a different expression altogether is more appropriate, to my mind. If you start adapting the pre-existing phrase, people will try to abuse it's true meaning (see the over-complicated blathering in the above post from Franky), as you suggested elsewhere. And "pre-chain" really is a much better description, because there is no situation under which Lightning transactions won't hit the main chain anyway (unlike what Franky is suggesting)

[franky1]

because there is no situation under which Lightning transactions won't hit the main chain anyway (unlike what Franky is suggesting)

wow lightning network gonna fix bitcoins ability to drop transactions. kool no more fee war because no transaction will be dropped
oh wait..
transactions will drop off still if they lack enough fee even when using lightening network.. (just one example)

[Carlton Banks]

understanding the brilliance of immutable transactions protected by a blockhash(confirm), then protected by the chain of blockhashes and difficulty of retrying hashes as more go ontop (more confirms as more blocks are added)

knowing that lightening doesnt have that immutable hash protection because the transactions are not settled

You know what I like about facts, Franky? Their immutability

And you're ignoring the fact that all outputs originate from chained hashing when they are mined to begin with, Bitcoin 101. What you're saying in essence is that Lightning will break double-spend protection, which isn't the case, as the Merkle root hash of every output is validated both today and with Lightning transactions.

what is your personal trust level opinion of a single signee zero-confirm transaction (trustless off-chain)
would you consider that as secure as a several confirmed immutable transaction..(onchain)

then having to rely on a multisig contract between multiple users (trust-based)
would you consider that as secure as a single signee zero-confirm (trustless off-chain)
would you consider that as secure as a several confirmed immutable transaction..(onchain)

You're talking gibberish man, there is no reliance on multiple parties for transaction immutability in Lightning. You're conflating multi-party addresses/transactions with Lightning's operation, likely in the hope that your bizarre presentation might confuse some poor frightened individual to believe it. More research needed, Franky lol

[illyiller]

The issue is trust---not on/off chain---there is a world of difference between "trust-based off-chain" and "trustless off-chain."

Well, that's why using a different expression altogether is more appropriate, to my mind. If you start adapting the pre-existing phrase, people will try to abuse it's true meaning (see the over-complicated blathering in the above post from Franky), as you suggested elsewhere. And "pre-chain" really is a much better description, because there is no situation under which Lightning transactions won't hit the main chain anyway (unlike what Franky is suggesting)

Fine. I will adopt your "pre-chain" term. But I will acknowledge that this is purely out of expediency.

Half-joking, but isn't "pre-chain" technically inaccurate, since channel-opening transactions are actually on the blockchain? So in a sense, LN transactions are also "post-chain."

[Carlton Banks]

Fine. I will adopt your "pre-chain" term. But I will acknowledge that this is purely out of expediency.

Half-joking, but isn't "pre-chain" technically inaccurate, since channel-opening transactions are actually on the blockchain? So in a sense, LN transactions are also "post-chain."

Lol you are right of course. There must be a better description.... chain-purgatory tx's maybe?