The impact of micro-transaction on Bitcoin

[AjithBtc]

Because of the high fee I already shifted to ETH for smaller amount transaction if a seller is ready to accept.

but no merchant accepts ethereum! it is not even a currency to be accepted as payment. and besides the fees are pretty high there too, they are getting very close to $1 now!

and you will have a much better chance finding a merchant that accepts Doge coin or Litecoin instead and they have a much lower fee and a much better security with no bugs.

Personally in my opinion it's good for high volume transaction. For low volume transactions and for the shopping requirement the merchant needs to be systematic to deliver the product once the respective amount gets added to the unconfirmed transaction list. Without this right now there is alternate rather than moving to altcoins. But with altcoins finding an store accepting it is hard.

[kickero0O]

IMHO, it has agreat impact on bitcoin and also to miners. Though it will clogged the systems for transaction, but I am hoping it will be done in fast transaction expecting more transaction to be cleared asap. Micro transaction and or micropayments will become popular in the future.

[cafucafucafu]

My concern is that if Bitcoin can be an effective medium of exchange tool? 

The reason why I asked is that there are fees associated to each of the transactions and the fees are increasing day after day, so it gets to a point that it is no longer justifiable to use Bitcoin to buy smaller items.  Higher fee becomes required as low fee transactions will be placed in the unconfirmed bucket for long time, if not forever, as no miners are willing to include them in the block to validate it.

How will the high transaction cost impact Bitcoin usage and price in the long run?  I would rather to see the future price increase is due to demand in the coin circulation than due to demand from speculation. 

Please provide your feedback.  Thanks.

Bitcoin and its ability to be used as a medium of exchange isn't really affected at all by micro transactions not being able to processed on the bitcoin network. What is really sacrificed is no longer can people transmit small amounts of money.

If you want to send big amounts of money, bitcoin is still king. It is significantly cheaper to send $1 million overseas with bitcoin, than with a bank account or a paypal account. And it's anonymous too. And did i mention that you don't need to be bugged by your taxation agency all the time to explain where your money came from as well?

All this will be sorted out in August as the community basically votes. Bitcoin will scale eventually no matter what.

[magneto]

My concern is that if Bitcoin can be an effective medium of exchange tool?  

The reason why I asked is that there are fees associated to each of the transactions and the fees are increasing day after day, so it gets to a point that it is no longer justifiable to use Bitcoin to buy smaller items.  Higher fee becomes required as low fee transactions will be placed in the unconfirmed bucket for long time, if not forever, as no miners are willing to include them in the block to validate it.

How will the high transaction cost impact Bitcoin usage and price in the long run?  I would rather to see the future price increase is due to demand in the coin circulation than due to demand from speculation.  

Please provide your feedback.  Thanks.

Your worry isn't really a valid worry at all - high transaction fees doesn't mean that bitcoin cannot be transferred. It just meants that small amounts of bitcoins cannot be transferred, but if someone is able to save up for a bigger amount of bitcoin that will still beable to be sent as payment.

However the high transaction fees combined with the high bitcoin prices is definitely causing a problem. I don't think i've eer used any sort of payment processor that charges me $2.5 on a $3 transaction i make. Not even paypal, honestly.

Maybe this is the reason why people decided to pump dogecoin a bit, because doge blockchain was relatively free and the transaction fees are still low as always - 1 doge

[Jayshree85]

My concern is that if Bitcoin can be an effective medium of exchange tool? 

The reason why I asked is that there are fees associated to each of the transactions and the fees are increasing day after day, so it gets to a point that it is no longer justifiable to use Bitcoin to buy smaller items.  Higher fee becomes required as low fee transactions will be placed in the unconfirmed bucket for long time, if not forever, as no miners are willing to include them in the block to validate it.

How will the high transaction cost impact Bitcoin usage and price in the long run?  I would rather to see the future price increase is due to demand in the coin circulation than due to demand from speculation. 

Please provide your feedback.  Thanks.

IF i am not wrong it will become like bitcoin will be used just like gold to perserve for long term and other altcoin for small transaction.

[haroldtee]

inability to achieve smaller transactions using bitcoin will definitely spring up other altcoins due to their lower transaction rate. But my fear and question is, won't that affect the demand level? Won't people start shifting their gears and start accepting other coins better than bitcoin? Maybe, that will throw a balance a little bit to the price of bitcoin or maybe displace it as the king of cryptocurrency and ethereum may be the coin to watch out for.

[Bitcoin Guy]

I think the micro transaction issue cannot never be solved because transactions require validations and validations requires computer time (variable cost) and hardware investment (fixed cost).  Any crytocurrencies, when gain enough popularity, the number of nodes increases, makes it harder for miners to get reward, and the compensation (transaction fee) has to go up enoguh to motivate miners to do the validations. That is how the blockchain works.  There is always a treat off. 

One way to stablize low transaction fee is to limit the number of miners to participate and lower the difficulty level.  However, in doing so, we would sacrify the security of the blockchain.  My brain is too small to come up with a good solution.