bitcoin fees, where's your limit?

[European Central Bank]

as the fees have been marching ever upwards, have you found yourself postponing or putting off transactions completely?

i have a balance with a bunch of inputs that got a little out of control so i've given up thinking of buying anything and am waiting for a reason to swallow the fees. guess my limit's already been reached.

would there be a point where you stopped buying things with bitcoin or would you do it for ideological reasons or because you're already sitting on a huge gain?

i could live with high fees if i felt bitcoin was showing strong signs of being gold 2.0, i'd park them and wait, but i think the market's just the same old bunch of people with no real signs of that on the horizon.

i think many massively overestimate the appetite the majority of users have for the expense and may end up a little surprised when many of them walk away, and even more who were considering it never dip a toe in.

is this a blip while we wait for a second layer, a new reality that most will be ok with or hubris that's gonna fatally bite some asses?

[franky1]

though % has some merit worldwide. and under 1% wold be ideal. bitcoin is  'amount' not % so. thinking of no entry of barrier world wide utility i would have to say:

1cent should be the limit.

third world countries deem 1cent to be atleast 10 minutes minimum wage work.
think of it like living in america, the equivalent of $2.50 as a way to imagine how the third world think about one U.S cent
think of it like living in UK, the equivalent of £1.25 as a way to imagine how the third world think about one U.S cent

5cents is an hours labour in a few countries. imagine it if your american or british as if it was an hours minimum wage labour.

spam should be solved by rejecting transactions of hundreds of sigops to allow thousands of people to transact instead of one transaction.
spam should be solved by using transaction maturity(like block reward coinbase maturity). by making it unspendable for X blocks. so people cant just respend every block
spam should be solved by code.. not economics

[Carlton Banks]

"A limit" suggests that all transactions below the so-called limit are discarded by miners. Not true, even 0 fee transactions have been getting confirmed since the recent mempool spike, just in much smaller numbers than previously.


"My limit"? It depends, just like the fees themselves.

Am I making small purchases from a website when I don't care how long it takes? Tiny, below average fees would be acceptable to me.

Am I just about to use a large amount of money to purchase something that represents an asset? Then I'm unlikely to care if the fee is 0.1% or even 1% of the total amount I'm spending, the investment itself should be sufficiently worthwhile that I don't care about the marginal loss.

[European Central Bank]

"A limit" suggests that all transactions below the so-called limit are discarded by miners. Not true, even 0 fee transactions have been getting confirmed since the recent mempool spike, just in much smaller numbers than previously.

good point. i've never attempted to send a zero fee transaction but my wallet doesn't allow it anyway.

[calkob]

I am hoping that this not the future (high fees) i cant see there being any appitite for it from the masses, yeah its only 9 pence or what ever but if the general public had to pay that everytime they sent money to someone or paid for a coffee then its going to be a hard sell,  paypal is free for them?  and yes theres the argument that maybe bitcoin isnt the day to day payment method but more of a settlement layer.  who knows time is going to tell.

[European Central Bank]

well, i've always felt the coffee thing is a kind of silly example. even if fees were super low, confirmations take time and who the hell needs a censorless way of paying for coffee?

commerce on the internet is a different matter. anyone should be able to transact where and when they want without needing approval and bitcoin is the perfect fit. if the ability for modestly valued transactions is priced out then the future potential has just stepped down several notches.

[franky1]

well, i've always felt the coffee thing is a kind of silly example. even if fees were super low, confirmations take time and who the hell needs a censorless way of paying for coffee?

commerce on the internet is a different matter. anyone should be able to transact where and when they want without needing approval and bitcoin is the perfect fit. if the ability for modestly valued transactions is priced out then the future potential has just stepped down several notches.

forget coffee.. think internationally!!

$2 is a weeks wage in some countries
suggesting 10cents (2 hours labour) is acceptable and a weeks wage is "spam" is the mindset of close minded people.

bitcoin should not be limited to developed countries, but open to any country. where CODE is used to limit spam. not economics
only the bank loving devs believe that economics is the answer. which makes me lose faith in those devs as coders because they are ignoring CODE as the answer to 'spam'

as for anyone thinking segwit is going to offer big discounts your wrong. the fee war over the last 11 months has made the average tx high, that segwits discount is just backdating prices back to last year..
its like going to walmart and seeing the price of some produce double in price just so they can stick a 50% off price ticket on afterwards, even if the discount is the same as before the proposal.

as for anyone thinking LN is going to offer big discounts its not (explained here https://bitcointalk.org/index.php?topic=1686040.msg16925401#msg16925401)

basically proposing $4 (0.0006) PRE-PAY fee just to use it. and it only works out cheap if you do thousands of tx's in the 10day lockin the scenario suggest..
the scenario and price examples are wrote by those coding LN..

the scenario also says
use it only once or twice, your penalised. try to close the channel early to not be penalized, guess what your penalized.

again LN is NOT USING CODE to mitigate error, blackmail or DDoS risks.. it uses economics.. completely ridiculous!!
but hey. when you see how the devs coding these 'features' are paid its becomes obvious why they prefer economics rather than logic/code

[Carlton Banks]

Re: low value or IRL transactions

Low value worked OK in the past, but IRL was never a great fit for Bitcoin, the merchant really needed too much faith in the customer. That's where the 2nd layer protocols will come into play, they can be designed to help ameliorate these issues.

[n691309]

as the fees have been marching ever upwards, have you found yourself postponing or putting off transactions completely?

i have a balance with a bunch of inputs that got a little out of control so i've given up thinking of buying anything and am waiting for a reason to swallow the fees. guess my limit's already been reached.

At least nowadays don't try to move your bitcoins because the there are lots of unconfirmed transaction so you have to add extra fees in order to get confirmed. The limit as franky said should be 1cent or 10 cent maximum and anything higher than that is not good for user(but good for miners). Since there is no change on block limit the fees will be the same and maybe getting higher.

[Carlton Banks]

The limit as franky said should be 1cent or 10 cent maximum and anything higher than that is not good for user(but good for miners).

Qualify this statement, with facts.

Also, what makes you think that $ 0.10 is going to be worth the same amount of Bitcoin forever?
What makes you think that $ 0.10 is going to be worth the same amount of goods forever?
What makes you think that a fixed amount of BTC is going to be worth the same amount forever?


I could go on, but it would help if you could think about even the most immediate/obvious problems before you make posts.

[Shiroslullaby]

franky1 brings up a good point.
I don't have a problem paying five or ten cents for a transaction, but in some areas, this would be much more money based on living wages.

We need to give miners a reason to process transactions, but keeping fees low will help spread the use of Bitcoin.
I really don't know the right answer.

[franky1]

when the bitcoin valuation reaches a certain average the minimum fee should be dropped
EG
the fee was averaging under 1 cent in 2012.. 0.001 @$6/btc (0.6cent)  (100sat/byte)

then the fee went down to 0.0001 (10sat/byte)
....

soon it should go down to 0.00001 (1sat/byte) so that when the fiat valuation goes above $1k the tx fee is still 'pennies'
then in future it should go down to 0.000001 1sat/10byte so that when the fiat valuation goes above $10k the tx fee is still 'pennies'
then in future it should go down to 0.0000001 1sat/100byte so that when the fiat valuation goes above $100k the tx fee is still 'pennies'
to atleast keep the minimum tx fee in the 'pennies' rate.

We need to give miners a reason to process transactions, but keeping fees low will help spread the use of Bitcoin.
I really don't know the right answer.

we dont need to worry about that now.. thats a thing that can happen naturally over DECADES, when it becomes needed. not a current issue.
at the moment blockreward=income.. fee=bonus... in DECADES it flips to fee=income reward=bonus. and in a century it becomes fee only.
so not an issue.

also more ONCHAIN transactions by scaling ONCHAIN will solve it.
after all do you want 4500 people paying $3 a tx each in 30 years because core kept the base block at 1mb for 30 years.
or have something like many thousands of people paying 3cents max because over 30 years scaling was allowed ONCHAIN

after all we are talking ATLEAST SIXTEEN years to a century in the future before fee's become important. if you go backward 16 years you will see the evolution of technology and know that things can move further in the future. so crying now about 64mb blocks in the future... is like:
at the millenium crying that 1mb is insane and wont be acceptable in 2016..
or back in 1984 crying that 15kb not being acceptable at the millenium.

EG
lets say 2017: 2mb base 4mb weight = 9000tx (yea i know dreaming that core give in to a version of segwit with dynamic baseblock, i know i know)
lets say 2020: 4mb base 8mb weight = 18000tx
before you say it.. calm down.. even in africa vodafone are starting 5G networks so it will be the norm by 2020
before you say it.. calm down.. fibre cables are starting so it will be the norm by 2020
lets say 2024: 8mb base 16mb weight = 36000tx
lets say 2028: 16mb base 32mb weight = 72000tx
lets say 2032: 32mb base 64mb weight = 144000tx

and then take into account a scenario of the block reward
year      BR            Fiat/btc      block reward value
2012      25            $120         $3,000
2013      25            $240         $6,000
2014      25            $400         $10,000
2015      25            $480         $12,000
before you say it.. calm down.. lets say we dont quadruple value in 4 years
2016      12.5         $700         $8,750
before you say it.. calm down.. lets say we dont near double value in 1 years but instead only double every 4 years(safe worse case scenario)
2020      6.25         $1,400      $8,750
2024      3.125         $2,800      $8,750
2028      1.5625      $5,600      $8,750
2032      0.78125      $11,200      $8,750

now we put it together assuming the tx fee stays around 6cents (as a worse case scenario for next 16 years)
year      BR             Fiat/btc     BR value   tx count   txfee      bonus      total(BR+fee)
2020      6.25          $1,400      $8,750      18000      6c         $1080      $9,830
2024      3.125         $2,800      $8,750      36000      6c         $2160      $10,910
2028      1.5625       $5,600      $8,750      72000      6c         $4320      $13,070
2032      0.78125      $11,200   $8,750      144000      6c         $8640      $17,390

or we go with a core doomsday
year      BR            Fiat/btc      BR value   tx count   txfee      bonus      total(BR+fee)
2020      6.25         $1,400      $8,750      4500         24c      $1080      $9,830
2024      3.125         $2,800   $8,750         4500      48c      $2160      $10,910
2028      1.5625      $5,600      $8,750      4500         96c      $4320      $13,070
2032      0.78125      $11,200   $8,750         4500      $1.92      $8640      $17,390

knowing tech wont be a problem in 16 years.
would you think bitcoin is best kept at 1mb base for 16 years costing people $1.92 to use bitcoin. for only 4500tx every ~10 minutes
would you think bitcoin grow ON CHAIN naturally for 16 years costing people $0.06 to use bitcoin. allowing 14400tx every ~10 minutes

obviously who would use bitcoin if limited use and nearly $2 a time..vs less limited use and 6cent a time.

[yayayo]

"A limit" suggests that all transactions below the so-called limit are discarded by miners. Not true, even 0 fee transactions have been getting confirmed since the recent mempool spike, just in much smaller numbers than previously.

[...]

Very true. Even with very low fees, transactions are eventually included in a block. And it doesn't even take as long as a wire transfer.

If people want fast confirmation, they have to pay adequate fees. The constant whining from the cheapskates is quite annoying. Doing transactions with Bitcoin is still dirt cheap considering the service provided. A healthy fee market is needed in Bitcoin's future, as mining rewards are diminishing. Also, adequate fees ensure optimized resource usage, which is a good thing.

The network is just currently being spammed with thousands of ultra low fee transactions. It could be the last desperate effort of the Andresen/Hearn/Ver-clan to obstruct progress in favor of their decentralization destroying power grab. It's a futile attempt. In my opinion, ultra low fee transactions should be directly dropped from the mempool and directly rejected.

ya.ya.yo!

[franky1]

Very true. Even with very low fees, transactions are eventually included in a block. And it doesn't even take as long as a wire transfer.

If people want fast confirmation, they have to pay adequate fees.

The constant whining from the cheapskates is quite annoying. Doing transactions with Bitcoin is still dirt cheap considering the service provided.

your thinking more like a banker that only lives and thinks about america... try opening your mind to borderless whole world utility

A healthy fee market is needed in Bitcoin's future, as mining rewards are diminishing. Also, adequate fees ensure optimized resource usage, which is a good thing.

over the next 120 YEARS. not days.

The network is just currently being spammed with thousands of ultra low fee transactions. It could be the last desperate effort of the Andresen/Hearn/Ver-clan to obstruct progress in favor of their decentralization destroying power grab. It's a futile attempt. In my opinion, ultra low fee transactions should be directly dropped from the mempool and directly rejected.
ya.ya.yo!

the hearn clan is actually the same as the blockstream clan.. i guess you didnt know that hearn R3.. gmaxwell, wuille blockstream are working together.. that was the ultimate bait and switch.
go look at gmaxwell and wuilles contract and employers. oh look BANKERS
yea even gavin(DCG) and garzik(BLOQ) are now in the banker pockets too... more bait and switching..

so far Ver is the only non-banker-bought independant.
as soon ver trades in his morals.. (hopefully never) and all the 'wallets' are in the pockets of bankers.. bitcoin is no longer independent.
you can stick your head in the sand and defend a banker buy attacking others as a distraction or ignorance of which side your on..

and im starting to think its the bankers (R3,DCG,blockstream) group thats spamming the network to try advertising the need to get everyone to activate segwit. but worded the opposite to blame ver, as the bait and switch to scare people over to segwit.. like a double con that hearn played

economic fee war and fee market are buzz words of the bankers.
CODE should solve the problems not fee's.
fearmongering scenarios of decades-century as the need of economic measures now is a failure to understand logic, code and technology.

[rapazev]

"A limit" suggests that all transactions below the so-called limit are discarded by miners. Not true, even 0 fee transactions have been getting confirmed since the recent mempool spike, just in much smaller numbers than previously.

[...]

Very true. Even with very low fees, transactions are eventually included in a block. And it doesn't even take as long as a wire transfer.

not exactly..
i do agree it is "just pay the adequate fee", but this "adequate fee" is increasing fast, the reward will decrease with time and the price will increase(i hope..).
in a few years, could be paying 200k+ satoshis in a transaction and converted to fiat that could mean 5~10 bucks (assuming the price is increasing).

more time, price increase, reward decrease, fee goes up... where does it stop? if i had to pay too much for a transaction, better just forget about bitcoin and go back to FIAT.. use my bank will be cheaper.

and well... if i dont pay the adequate fee, it could take longer than a wire transfer

[franky1]

if i had to pay too much for a transaction, better just forget about bitcoin and go back to FIAT.. use my bank will be cheaper.

and well... if i dont pay the adequate fee, it could take longer than a wire transfer

and now you see the economics problem the bankers of blockstream are pushing for.
their solution is then dual authorisation offchain payments... hmmm... and i wonder who will be running these hubs.

duel authorisation.. hmm thats what banks do.. sounding familiar?

so segwit(wuille) and LN(rustyrussel). are coded by guys that are paid by banks. trying to pull people away from bitcoins immutable and independent blockchain into dual-authorised payment methods with fee's attached........ im surprised im even having to spell it out for people

anyway. back on topic.
fee's need to stay practical at only a few pennies/cents at MOST. to not cause a barrier of entry (world wide).
CODE needs to strengthen the 'spam guards' not fee's
scalability needs to grow naturally and eventually AFTER DECADES of growth cover the mining cost burden, not months

[exstasie]

as the fees have been marching ever upwards, have you found yourself postponing or putting off transactions completely?

Not really. Recent fees to get into the next block have been 11-12 cents USD based on median transaction size. A few weeks ago, I was paying 7 cents. The price of BTC against USD is also up ~150% year over year. Of course USD-equivalent fees will rise as Bitcoin rises against USD.

But even given that, the cost to users for a confirmation is quite low. Incredibly low, given the security provided. The cost per confirmed transaction to miners is significantly higher (based on IC3's research, something like $1-6). So our confirmations are subsidized pretty heavily by miners' speculation on the future price of Bitcoin.

[franky1]

as the fees have been marching ever upwards, have you found yourself postponing or putting off transactions completely?

Not really. Recent fees to get into the next block have been 11-12 cents USD based on median transaction size. A few weeks ago, I was paying 7 cents. The price of BTC against USD is also up ~150% year over year. Of course USD-equivalent fees will rise as Bitcoin rises against USD.

But even given that, the cost to users for a confirmation is quite low. Incredibly low, given the security provided. The cost per confirmed transaction to miners is significantly higher (based on IC3's research, something like $1-6). So our confirmations are subsidized pretty heavily by miners' speculation on the future price of Bitcoin.

the block reward is the income.. the fee is the bonus.. the switch over when fee's become important wont be for a few decades.
also research has noted that due to the energy efficiency of ASICS and the average amount of asics used to confirm a block, the block reward alone is making pools PROFIT. not loss. (im guessing IC3 probably used worse case scenario electric and asic costs. not rational values)
in short pools are making a profit, not a loss

so fee's are not a subsidy. again they are categorized right now as a bonus.

lastly. the delays of segwit and the fee war have caused a fee price hike. so the mindset of segwits 'discount' proposals last year would have been 4 cents discounted to 1cent.. but now reality of only 1.8x capacity (not 4x) and todays average fee.. is:
7cents discounted to just shy of 4cents
or your 11cents discounted to just over 6cents. which is not really the proposed and hyped 'discount' price expectation given last year.

with the new 'average fee' rather than reactive fee metrics, the fee will be higher by the time segwit is activated. so in no way, shape, or form can anyone expect to pay under 4 cents even after discount and still gain 'priority' based on a low priority transaction before adding a fee. 

[arcanaaerobics]

There's no limit when you have to make an transfer, that's the truth and that's why we use banks and others service that meanwhile charge high fees/taxes from us.

I want to see what will happen if we got a mass adoption, will we pay 50% of fee?

[MingLee]

Still have yet to completely postpone a transaction, mostly because I don't hesitate to put a $0.10 fee with a transaction, and even then it is rarely that large. I've seen maybe $0.08 be the largest amount of Bitcoin I had as a pre-set transaction fee.

If it goes beyond $0.15 then I think I'll start to wait a bit until I send a transaction. Until then, I'm not really worried.