Mining fees will eventually kill bitcoin

[X-ray]

Mining fee is what motivate the miners to keep mining for traders and generally transactions bitcoin are made possible through activities of miners. So without mining no bitcoin and without bitcoin no transactions and without transactions no fee to pay.

LOL, that's really shit. The miners are too greedy to take more fees from every transaction. It looks like they are not care about the bitcoin scalability problem and try to vote on the wrong way and it means killing the bitcoin in the future. I don't agree with your opinion.

[serjent05]

Could the processing that's done by miners be coded into the activity that blockchain takes in the transaction? There's nothing unique from one miner to the next, they're just verifying the transaction...doing the math, so to speak. If it's just math it can be coded and automated and set free for the world.

Evolution has occurred with all great advancements in society, Bitcoin is not immune to that eventuality and the idea of bitcoin is strong enough to generate the inspiration required to make that evolution reality.

If I'm being super naive here, let's talk...I want to learn!

Essentially, miners serve two functions, they verify transactions while propagating the network. The miner who "solves" each block gets to include whichever transactions in the block he wants. Obviously, to maximize his own reward, he will choose the transactions that have the highest fees/byte. This is why over time, mining will get more expensive and the fees it takes to get your transactions into a block will increase. If you don't pay a high enough fee, you'll constantly be line-jumped by everyone willing to pay more. This is a free-market system, but not a cost efficient one.

This means Bitcoin is coded to Transaction fee war, which can be fixed if the Developer are so keen about the possibility of the thing that is happening right now.  But well I can say developer are developer and probably they lack knowledge about economics.  Aside from that they only base their codes according to their current country's situation and pricing ignoring the other part of the world that even a cent cost a fortune for them.

I guess, if only they implement a first sent, first serve method, there will be no confirmation that will be unconfirmed for several days.

[Taki]

The fees are getting more and more expensive everyday!

Just today, i sent 3.77 usd and the bitcoin core client wanted 0.50 cents, that's ridiculous for 3.77

i created my own fee and the fee turned out to be 0.07, it's been 7 hours and no confirmations yet,

im not worried, i think eventually it will go through, and i wanted to test it to see how long it would take,

but yes, bitcoin would not work for small transactions for stores and between strangers, its too slow

i know the 0.50 cent fee would of been super fast, but it's way to expensive,

i remember when there was free fees and it was fast,

i have no problem if there is no free fees, i don't mind paying fees, to support the bitcoin technology because the transactions fees help the miners, but it is getting way out of control

i don't think bitcoin will go down that easy, it's still very convenient to transfer lots of money, millions,
 
i'm not ready to give up on bitcoin yet, but i hope they fix things, or yes it could kill bitcoin

That's right. Many participants of the site explain bitcoin as the way to skip that kind of fees that we usually pay for money transfer. But actually all this sites that work with bitcoin are taking their fees as well. And unfortunately there are not so many places here that would work with bitcoin directly. So every time the process of turning bitcoin into fiat takes from me like 10% and it's a lot.

[deisik]

Yes, the mining fees are getting more and more expensive day by day and we must find any concrete solution for it otherwise, it will reach the level of what other fiat companies are charging today. The core benefit of bitcoin is that it is (still) cheaper than other payment options in terms of transaction costs and it needs to remain under control.

yes i am also not in favour of increasing the mining fee. i also think that this problems must of solve on priority basis include the bitcoin transaction fee also.

it's common misconception that are miners increasing the fee, it's actually the user that by wanting to be first among other is paying more, the more you pay the higher is your transaction priority against other,

this is happening because of the limitation of the block, and this why bitcoin will not die because of fee increase

This is not a misconception, by any means

It looks more like it is you not caring or wanting to look deeper into the matter. So before aggressively hitting the Quote button, honestly answer just two questions. First, are users interested in paying more fees to miners? And second, are miners interested in users paying more fees to them? If the answer to the first question is negative while to the second positive, think again before hitting that button. Perhaps, it is you after all who is misunderstanding something here, and it is actually miners who are making the users pay higher transaction fees (whether the latter like it or not)

How is it the miners causing this? It seems to be the inevitable outcome of a truly fair market system where a limited number of transactions can be processed at any one time. Competition over a limited amount of block space is what determines the price of the transaction fee. If all the payers refused to pay a fee above 20 sats/byte, miners would have no choice but to accept that as the fee because nothing else is available. Because there is competition for this limited space, and people willing to pay more to essentially line jump, the miners aren't causing the price to rise, they're just reaping the reward from it. The limited space in the block and competition for a slot in it is what is causing transaction fees to rise as transaction volume creates more congestion to compete against

See my post above

You seem to be (likely erroneously) assume that we have a truly fair market system. While your logic looks to be pretty consistent, your basic premises appear to be wrong (i.e. a free market existing). There was a thread recently about some mining pool deliberately not filling up found blocks with mempool being overfilled. That pretty much tells it all. If there were a truly free market in respect to mining (with hundreds of independent miners), such actions would make absolutely no sense since transactions not included in this block will be included in the next block found by another miner. But just because there would be plenty of miners, they would be massively disincentivized to act like this miner does, By doing that (i.e. pushing half-empty blocks), such miners would be shooting themselves in the foot. They would be just giving away transaction fee profits to other, less rogue miners. But since this is not a free market at all (with only a dozen of miners processing 99% of all transactions), the free market laws fail miserably here

[Doamader]

We all knew fees would play a paper once all coins full mined, we didnt know we would have to start paying bigger fees now to miners proces the same transactions as they made in the past since now each satoshis has much more value. It were to keep the same fees or atleast reduce the fee, but looks like miners wanna go other way, and those might damage a lot bitcoin.

[Kevin77]

Mining fee is what motivate the miners to keep mining for traders and generally transactions bitcoin are made possible through activities of miners. So without mining no bitcoin and without bitcoin no transactions and without transactions no fee to pay.

LOL, that's really shit. The miners are too greedy to take more fees from every transaction. It looks like they are not care about the bitcoin scalability problem and try to vote on the wrong way and it means killing the bitcoin in the future. I don't agree with your opinion.

What to do ? Everyone is working for their own benefits and hence miners too.
Actually with bitcoin prices above $1200 levels, we must have transaction fees lesser than 10k satoshi. But we are being forced to pay 10 times more fees. It is really pathetic situation like how miners of blocking scalability of block size.

The block size and mining fees are highly interrelated, I believe both will get resolved in our favour way in very near future. Because this is how a decentralized system should work.

[Pattberry]

We all knew fees would play a paper once all coins full mined, we didnt know we would have to start paying bigger fees now to miners proces the same transactions as they made in the past since now each satoshis has much more value. It were to keep the same fees or atleast reduce the fee, but looks like miners wanna go other way, and those might damage a lot bitcoin.

The fees is not determined with the valuation in dollars and when all the coins are mined transaction charges will be the only incentives they have to keep on running the huge farms and in the mean time it wont be that profitable and the possibility that the fees will increase in the future is imminent unless and until the core developers find a solution for all these issues.

[LoyceV]

Before anything, if the amount of profit obtained per block goes up, that should necessarily cause the fees to drop, nor rise (in a free market). I guess this is the first thing that should happen if there were a genuine competition between miners.

This would happen in a free market. If it becomes cheaper to produce bicycles, sales prices can go down.
But Bitcoin transactions are scarce. Unlike new bicycles, users have to compete with eachother.

If blocks wouldn't be full, it would make perfect sense to pay a lower fee (measured in Bitcoin) if the Bitcoin-price (measured in USD) goes up.

Suppose Bitcoin could handle 8 times more transactions. Fees would be lower, but more transactions means more fees anyway. And more importantly: Bitcoin could facilitate 8 times more users, which means the price could go up an order of magnitude. How can miners not see this?

[deisik]

Before anything, if the amount of profit obtained per block goes up, that should necessarily cause the fees to drop, nor rise (in a free market). I guess this is the first thing that should happen if there were a genuine competition between miners.

This would happen in a free market. If it becomes cheaper to produce bicycles, sales prices can go down.
But Bitcoin transactions are scarce. Unlike new bicycles, users have to compete with eachother.

If blocks wouldn't be full, it would make perfect sense to pay a lower fee (measured in Bitcoin) if the Bitcoin-price (measured in USD) goes up

You got my point absolutely wrong

First of all, Bitcoin transactions cannot be scarce by definition, otherwise blocks wouldn't be full (according to your logic). There is an outright contradiction in these few sentences above, i.e. transactions are scarce while blocks are full (that's an impossible combination). Further, I don't mind if you quote part of my posts (as long as you don't get that part completely out of context and distort the meaning of the whole post), but in this case, I explained it elsewhere in my post that the transaction jam is artificial and intentional. I even mentioned a thread about some mining pool consistently not including half of the transactions leaving their blocks half empty lately. With mempool now being chronically overcrowded, there is only one plausible explanation behind that. You guess what

[LoyceV]

You got my point absolutely wrong

First of all, Bitcoin transactions cannot be scarce by definition, otherwise blocks wouldn't be full (according to your logic). There is an outright contradiction in these few sentences above, i.e. transactions are scarce while blocks are full (that's an impossible combination).

Maybe we have a different definition of the word "transaction". When I say "transaction", maybe I should have used the word "confirmed transaction". It's not that Bitcoin has a lack of people wanting to make transactions, the scarcity limits the number of possible transactions that can be confirmed.

[NEWGOODOUBLE]

you need a large fee to get the trasaction and confirmation that fast. I think this has strayed far from the tagline bitcoin with cheap and fast fee like some years before? lol

[deisik]

You got my point absolutely wrong

First of all, Bitcoin transactions cannot be scarce by definition, otherwise blocks wouldn't be full (according to your logic). There is an outright contradiction in these few sentences above, i.e. transactions are scarce while blocks are full (that's an impossible combination).

Maybe we have a different definition of the word "transaction". When I say "transaction", maybe I should have used the word "confirmed transaction". It's not that Bitcoin has a lack of people wanting to make transactions, the scarcity limits the number of possible transactions that can be confirmed

I don't quite agree with your usage of the term scarcity in respect to confirmed transactions, but let's use that. And what makes you think this "scarcity" is not created deliberately to raise fees even higher? Basically, you are trying to explain things from a free market point of view when there is no such market, to begin with

Suppose Bitcoin could handle 8 times more transactions. Fees would be lower, but more transactions means more fees anyway. And more importantly: Bitcoin could facilitate 8 times more users, which means the price could go up an order of magnitude. How can miners not see this?

As I said above, the free market outlook cannot be applied here for the lack of this market in the first place

So your base assumption is erroneous. There won't be many more transactions, therefore increasing block size will just reveal the miners' wrong-doing. Apart from that, I'm heavily inclined to think that the number of valid transactions (i.e. not spammy ones, probably generated by miners themselves) are decreasing overall. Not because Bitcoin user base is shrinking, but simply because people are finding workarounds to escape higher fees and use services (like web wallets and exchangers) that make offchain transactions possible or just group payments to lower the total fee amount per transaction

[Xester]

We all knew fees would play a paper once all coins full mined, we didnt know we would have to start paying bigger fees now to miners proces the same transactions as they made in the past since now each satoshis has much more value. It were to keep the same fees or atleast reduce the fee, but looks like miners wanna go other way, and those might damage a lot bitcoin.

This is due to the the problem on the bitcoin mining sector. Blocksize problem has caused tremendous problems on the network, one is the high miner fees and the other one is the long confirmation of transaction. Well to add the last probably and one of the disappointing fact is the disapproval  of the ETF due to blocksize problems.

[hajimasan]

We all knew fees would play a paper once all coins full mined, we didnt know we would have to start paying bigger fees now to miners proces the same transactions as they made in the past since now each satoshis has much more value. It were to keep the same fees or atleast reduce the fee, but looks like miners wanna go other way, and those might damage a lot bitcoin.

This is due to the the problem on the bitcoin mining sector. Blocksize problem has caused tremendous problems on the network, one is the high miner fees and the other one is the long confirmation of transaction. Well to add the last probably and one of the disappointing fact is the disapproval  of the ETF due to blocksize problems.

Here  the main thing that I am thinking is that  " mining profit " .
We are  all know that mining are not much profitable now but here a big thing is that where will go the miners who are spending thier money for mining , So usually time to time the fee increases by the network of bitcoin  So that the more and more person try to make some better earning and support the bitcoin network to make the transaction much smooth .
Well here I will say that the increase in the fee is only a step to increase the future of bitcoin at a great level .
This will not kill the bitcoin future at all .

[deisik]

We all knew fees would play a paper once all coins full mined, we didnt know we would have to start paying bigger fees now to miners proces the same transactions as they made in the past since now each satoshis has much more value. It were to keep the same fees or atleast reduce the fee, but looks like miners wanna go other way, and those might damage a lot bitcoin.

This is due to the the problem on the bitcoin mining sector. Blocksize problem has caused tremendous problems on the network, one is the high miner fees and the other one is the long confirmation of transaction. Well to add the last probably and one of the disappointing fact is the disapproval  of the ETF due to blocksize problems.

Here  the main thing that I am thinking is that  " mining profit " .
We are  all know that mining are not much profitable now but here a big thing is that where will go the miners who are spending thier money for mining , So usually time to time the fee increases by the network of bitcoin  So that the more and more person try to make some better earning and support the bitcoin network to make the transaction much smooth .
Well here I will say that the increase in the fee is only a step to increase the future of bitcoin at a great level .
This will not kill the bitcoin future at all

For all your ardor and enthusiasm, I think you don't quite understand how things work in respect to mining

First, we all don't know how profitable is mining, so it's no good to make such sweeping assumptions. But ultimately, this is irrelevant since mining will always remain profitable by definition. There is absolutely no need to make it look as if low mining profits somehow justify high transaction fees. Raising fees in every possible way is used to maximize mining profits, but this is possible only because the whole concept behind mining is skewed. I don't mean mining itself as a process of confirming transactions, of course. I rather mean the model behind mining which makes possible heavy centralization (read monopolization) of mining, which is what the real culprit behind miners trying to squeeze profits from every dollar spent

[hardtime]

Mining fees are going to be a problem that we face at the moment but people are going to have to come to the conclusion that the miners are going to be needed to be compensated somehow, as the amount of new coins being generated by the bitcoin network are halving as we all know it.

This makes everything less and less profitable for the miners which in turn makes it less likely that people are going to be mining, let along spending hundred of thousands of dollars in machines that are never going to pay themselves off. The mining fees are the part that is helping to fill the gap from the halving, but I do know that this issue is going to have to be faced as no one wants to spend a huge percentage of what they're going to be buying on fees for using it.

Segwit please.

[deisik]

Mining fees are going to be a problem that we face at the moment but people are going to have to come to the conclusion that the miners are going to be needed to be compensated somehow, as the amount of new coins being generated by the bitcoin network are halving as we all know it.

This makes everything less and less profitable for the miners which in turn makes it less likely that people are going to be mining, let along spending hundred of thousands of dollars in machines that are never going to pay themselves off. The mining fees are the part that is helping to fill the gap from the halving, but I do know that this issue is going to have to be faced as no one wants to spend a huge percentage of what they're going to be buying on fees for using it

Did you ever ask yourself that these machines should not be there in the first place?

That mining as it is today is a waste of resources mostly (waste of money, time, effort and whatnot)? That you don't need all those huge mining farms to confirm transactions? That Bitcoin network security doesn't depend on how much hashing power is required to find a new block? That it depends first and foremost on the number of independent miners and that any typical computer could confirm transactions as good as any advanced mining farm out there? And that in the latter case fees would be close to negligible?

[equator]

Now that the SEC has rejected the Winklevoss bitcoin ETF, I decided to actually glance through their S-1 (registration statement) that they filed with the SEC just for the heck of it. The S-1 requires a statement and discussion of possible risks associated with a security that is seeking SEC registration. In the Winklevoss S-1, I found this section particularly noteworthy (emphasis is original):

As the number of Bitcoins awarded for solving a block in the Blockchain decreases, the incentive for miners to continue to contribute processing power to the Bitcoin Network will transition from a set reward to transaction fees. The requirement from miners of higher transaction fees in exchange for recording transactions in the Blockchain may decrease demand for Bitcoins and prevent the expansion of the Bitcoin Network to retail merchants and commercial businesses, resulting in a reduction in the Blended Bitcoin Price.

If transaction fees paid for the recording of transactions in the Blockchain become too high, the marketplace may be reluctant to accept Bitcoins as a means of payment and existing users may be motivated to switch from Bitcoins to another Digital Math-Based Asset or back to fiat currency. Decreased use and demand for Bitcoins may adversely affect their value and result in a reduction in the Blended Bitcoin Price.

Not only is this a risk that they highlighted, my view is this is inevitable, and that mining fees will eventually become prohibitive not only to bitcoin expansion, but everyday bitcoin function. This is the flaw that will eventually render bitcoin unusable for everyday commerce, and the price will decline accordingly as demand for coins falls off as a result.

Mining fees will eventually kill bitcoin, the question is if this is avoidable with some type of change, or a predetermined fate that cannot be altered due to the nature of the ecosystem?

If what stated on the statement is correct then it is sure that in the coming days Bitcoin future is very bad in shape due to heavy transaction charges, so as stated it is also good for other altcoin which are having good platform which can over take bitcoin, and in that ETH is on first race to opt Bitcoin future.

[danherbias07]

you need a large fee to get the trasaction and confirmation that fast. I think this has strayed far from the tagline bitcoin with cheap and fast fee like some years before? lol

Yes that line is out. But it is not bitcoin fault but ours.
Miners just need something to make them work harder. Although it is really bad and kind of greedy and also it is like giving special treatment to those who can afford. What is the difference now between bitcoin transactions and paypal or western union.
I kind of stayed here for that reason at start though it changed from time it is still not a good look.

[gentlemand]

I think the current fee situation is several years premature. The block reward still makes up the large majority of miner payment. I don't know how much fee head room is left before people start shopping elsewhere.

Some bitcoin fans act like it has already won. Maybe they'll still be here after everyone else has reached their breaking point and they'll have wonderfully cheap fees again because there won't be any transactions.

Right now everyone should be all out to on board as many people as possible. Very few have a genuine need to use it, they just want to use it and that's slowly eroding.

you need a large fee to get the trasaction and confirmation that fast. I think this has strayed far from the tagline bitcoin with cheap and fast fee like some years before? lol

Whoever started that sakes pitch was very stupid. This was always going to happen but it's happening far too soon.