Bitcoin Transaction Fees Sustainable?

[ulhaq]

Right now the average transaction fee is ~ $3 USD. For any businesses operating in small amounts that want to accept bitcoin, it is not feasible. The 3-5% that a credit card company charges will be much lower per transaction.

Let's say the increases in the blocksize cause fees to go down. Will it ever be able to compete with the credit card companies in terms of number of transactions, time of confirmation, and transaction fees? Surely the architecture at visa or mastercard are more efficiently designed for a large number of transactions, and why would bitcoin ever be able to compete with this? Is it inevitable that bitcoin will not be able to compete in terms of what credit cards can do?

[ebliever]

You need to start learning about the Lightning Network and offchain scaling. In the future very few people will transact with Bitcoin on-chain.

https://lightning.network/

Edit:
Here's a more readable article on one vision for scaling Bitcoin from a significant player: https://coinjournal.net/blockstream-president-adam-back-shares-roadmap-scaling-bitcoin/

PS: You can still get TX thru almost for free (a few cents) if you time it right or are patient. Segwit is increasing effective capacity daily.

[SimonJones]

Fees will keep going down slowly. For microtransactions there are other coins you can use.

[ulhaq]

You need to start learning about the Lightning Network and offchain scaling. In the future very few people will transact with Bitcoin on-chain.

https://lightning.network/

Edit:
Here's a more readable article on one vision for scaling Bitcoin from a significant player: https://coinjournal.net/blockstream-president-adam-back-shares-roadmap-scaling-bitcoin/

PS: You can still get TX thru almost for free (a few cents) if you time it right or are patient. Segwit is increasing effective capacity daily.

My understanding of the lightning network was that it would allow multiple exchanges between 2 parties, which would then be represented by a single on-chain transaction. But for a merchant with lots of individual one-time customers, it would not work?

[dutchkay]

I will say that tx charges of bitcoin is a killer. Way too much for small time business owners to cope. If Bitcoin really wants to compete with FIAT then some things really needs to be worked on.

[cloud777]

Fees will keep going down slowly. For microtransactions there are other coins you can use.

I never heard that BTC can be used only for big transactions. What can I do if network is congested and I have only BTCs?
It's a big problem because BTC was originally thought for buy an icecream or a newspaper (alternatively you can pay less fees but you must wait for hours: it's an undeniable limit).
Maybe next forks will not be so useless...

You need to start learning about the Lightning Network and offchain scaling. In the future very few people will transact with Bitcoin on-chain.

I think It could be a very good idea! 

[stompix]

Right now the average transaction fee is ~ $3 USD. For any businesses operating in small amounts that want to accept bitcoin, it is not feasible. The 3-5% that a credit card company charges will be much lower per transaction.

No , the average transaction is not even near that point. You are talking about the transaction fee that will get your tx confirmed in the next block.

Last block
https://blockchain.info/en/block/00000000000000000050d46fd066546fc0595aed05a850e85256ebce2837cd51
had 1120 and 0.20 transaction fees.
That is 1.01 $ at the current price.

Fees will keep going down slowly. For microtransactions there are other coins you can use.

Too bad almost nobody is accepting those coins.

[Squidoogeek]

For small transactions on the level of buying a latte, I'd probably push for the adoption of promising altcoins with lower fees and faster confirmation times. In the meantime, keep saving your bitcoin until you're at the level where you can buy a house with it.  

[Youghoor]

It is a very low amount mate, what are you complaining about? When the price touched $4000 at first, the fees went from $3 to $6 in just a few days, it was insane, but now they are so cheap, i dont know why are you complaining about it. Yesterday i did a payment and it only costed me for about $2, and it is soo cheap compared to a few days ago fees.
But it is expensive if you are only sending payments of less than ten dollars, of course..

[ohlawdy]

It is a very low amount mate, what are you complaining about? When the price touched $4000 at first, the fees went from $3 to $6 in just a few days, it was insane, but now they are so cheap, i dont know why are you complaining about it. Yesterday i did a payment and it only costed me for about $2, and it is soo cheap compared to a few days ago fees.
But it is expensive if you are only sending payments of less than ten dollars, of course..

Well i can send money trough my bank for cheaper , which takes away one of the advantages btc .
Also the transaction time is much higher to, unless you pay more.

[dothebeats]

Fees will keep going down slowly. For microtransactions there are other coins you can use.

The topic is about bitcoin's fees and not other coins' fees. If one would transfer money to exchanges first before they  transfer their own money, wouldn't it be hassle-free and economical to just do a single transaction and be done with it? Also, off-chain transactions are becoming a thing now, and we're not far away from seeing the lightning network come into play which will make a significant decrease on the amount of fees to be paid per transaction.

[ne3eble]

Exactly this makes bitcoin unusable for small scale POS transactions. There are plenty of other cryptos that seem to do just fine like ethereum or ripple

[lighpulsar07]

Right now the average transaction fee is ~ $3 USD. For any businesses operating in small amounts that want to accept bitcoin, it is not feasible. The 3-5% that a credit card company charges will be much lower per transaction.

Let's say the increases in the blocksize cause fees to go down. Will it ever be able to compete with the credit card companies in terms of number of transactions, time of confirmation, and transaction fees? Surely the architecture at visa or mastercard are more efficiently designed for a large number of transactions, and why would bitcoin ever be able to compete with this? Is it inevitable that bitcoin will not be able to compete in terms of what credit cards can do?

well the price of bitcoin is over 5000 usd of course the transaction fee will be high but the in terms of bitcoin it is exactly the same if you compare the transaction fee of 2015 when the price of bitcoin is very low which is 200usd and it will still the same transaction fees but due to price increase it will be high. of course bitcoin nowadays for small businesses is very unfeasible now.

[Razick]

Right now the average transaction fee is ~ $3 USD. For any businesses operating in small amounts that want to accept bitcoin, it is not feasible. The 3-5% that a credit card company charges will be much lower per transaction.

Let's say the increases in the blocksize cause fees to go down. Will it ever be able to compete with the credit card companies in terms of number of transactions, time of confirmation, and transaction fees? Surely the architecture at visa or mastercard are more efficiently designed for a large number of transactions, and why would bitcoin ever be able to compete with this? Is it inevitable that bitcoin will not be able to compete in terms of what credit cards can do?

The problem with transaction fees at the moment is not that the network is overly congested. It is coming close, but in reality the real reason is exchanges and companies, and wallet providers are setting their fees too high in order to push transactions through as fast as possible, which then causes lower fee txs to take longer. If everyone would drop their fees accordingly, we would not have this problem.

[Jovovich]

Right now the average transaction fee is ~ $3 USD. For any businesses operating in small amounts that want to accept bitcoin, it is not feasible. The 3-5% that a credit card company charges will be much lower per transaction.

Let's say the increases in the blocksize cause fees to go down. Will it ever be able to compete with the credit card companies in terms of number of transactions, time of confirmation, and transaction fees? Surely the architecture at visa or mastercard are more efficiently designed for a large number of transactions, and why would bitcoin ever be able to compete with this? Is it inevitable that bitcoin will not be able to compete in terms of what credit cards can do?

The problem with transaction fees at the moment is not that the network is overly congested. It is coming close, but in reality the real reason is exchanges and companies, and wallet providers are setting their fees too high in order to push transactions through as fast as possible, which then causes lower fee txs to take longer. If everyone would drop their fees accordingly, we would not have this problem.

I think it is increasing as the price of bitcoin is increasing. Normally in early days, .001 is not really that high but since the price went up it also means it goes up. For me blaming the price means also like blaming the price increase of bitcoin. I think as a trader, the mind set is if you need money as fast as possible, then pay high rates, but if not then we should go for lower prices. Different as a miner because they make transactions and fees actually is convenient for them.

[Kaller]

Right now the average transaction fee is ~ $3 USD. For any businesses operating in small amounts that want to accept bitcoin, it is not feasible. The 3-5% that a credit card company charges will be much lower per transaction.

Let's say the increases in the blocksize cause fees to go down. Will it ever be able to compete with the credit card companies in terms of number of transactions, time of confirmation, and transaction fees? Surely the architecture at visa or mastercard are more efficiently designed for a large number of transactions, and why would bitcoin ever be able to compete with this? Is it inevitable that bitcoin will not be able to compete in terms of what credit cards can do?

The problem with transaction fees at the moment is not that the network is overly congested. It is coming close, but in reality the real reason is exchanges and companies, and wallet providers are setting their fees too high in order to push transactions through as fast as possible, which then causes lower fee txs to take longer. If everyone would drop their fees accordingly, we would not have this problem.

I think it is increasing as the price of bitcoin is increasing. Normally in early days, .001 is not really that high but since the price went up it also means it goes up. For me blaming the price means also like blaming the price increase of bitcoin. I think as a trader, the mind set is if you need money as fast as possible, then pay high rates, but if not then we should go for lower prices. Different as a miner because they make transactions and fees actually is convenient for them.

It does not need to be that way, though. Transaction fees don't absolutely have to go up, it is just how Bitcoin happens to be coded.

[stompix]

Right now the average transaction fee is ~ $3 USD. For any businesses operating in small amounts that want to accept bitcoin, it is not feasible. The 3-5% that a credit card company charges will be much lower per transaction.

Let's say the increases in the blocksize cause fees to go down. Will it ever be able to compete with the credit card companies in terms of number of transactions, time of confirmation, and transaction fees? Surely the architecture at visa or mastercard are more efficiently designed for a large number of transactions, and why would bitcoin ever be able to compete with this? Is it inevitable that bitcoin will not be able to compete in terms of what credit cards can do?

The problem with transaction fees at the moment is not that the network is overly congested. It is coming close, but in reality the real reason is exchanges and companies, and wallet providers are setting their fees too high in order to push transactions through as fast as possible, which then causes lower fee txs to take longer. If everyone would drop their fees accordingly, we would not have this problem.

I think it is increasing as the price of bitcoin is increasing. Normally in early days, .001 is not really that high but since the price went up it also means it goes up. For me blaming the price means also like blaming the price increase of bitcoin. I think as a trader, the mind set is if you need money as fast as possible, then pay high rates, but if not then we should go for lower prices. Different as a miner because they make transactions and fees actually is convenient for them.

It has nothing to do with the price of bitcoin.
The highest fees bitcoin experienced (median fees) were while it was almost 3 times lower in price.
Also we had fees of 100 satoshi while bitcoin was hovering around 6k.

The value of the fees is not related to the price of bitcoin, it is related to the number of transactions that are stacking up in the mempool.
We had this problem even during the rally to 1000 and the fees were not 6 times lower.

Beside that the fees can't go that high, imagine the price would double and by that logic the average fee would be 10$.
Who is going to use bitcoin to pay for vpns domains or even groceries? Nobody.
Then the usage will drop and since we will have enough space the fees will also drop which will make usage once more attractive....
Never ending cycle ......

[LoyceV]

For microtransactions there are other coins you can use.

You could also use your creditcard. That's irrelevant if I want to use Bitcoin.

The problem with transaction fees at the moment is not that the network is overly congested. It is coming close, but in reality the real reason is exchanges and companies, and wallet providers are setting their fees too high in order to push transactions through as fast as possible, which then causes lower fee txs to take longer. If everyone would drop their fees accordingly, we would not have this problem.

It's a combination of both: the network is congested, and wallets automatically try to use "a fast fee". That's why recommended fees can quickly jump from 20 sat/byte to 250 sat/byte. And because most wallets now automatically try to use a "next block"-fee, paying a higher fee doesn't help you get in the next block at all. I recently found a 10 kB transaction with $115 fee, that took 11 hours to confirm. It's outrageous!

Automatic fees are the worst thing for fees ever, and miners earn millions of dollars from it! Without automatic fees, most users would just select for instance 0.1 mBTC, and if you're in a hurry, you'd pick 0.2 mBTC. Note that 0.2 mBTC is already more than a dollar.
With automatic fees, all users pay (say) 1 mBTC, and in the end, since blocks are full anyway, we're still waiting!

[ulhaq]

So no one has really answered the initial question: can this problem be solved? Otherwise merchants are going to move away from bitcoin, and per reports are already shifting to bitcoin cash.

But besides that, are there theoretical reasons to believe that bitcoin will be able, far in the future, to be able to handle all the transactions of the credit card companies, in a reasonable time, and with fees that are reasonable to small merchants?

[Virtual miner]

Fees will keep going down slowly. For microtransactions there are other coins you can use.

We have been listening this for a while but all I have seen is increasing fees. Never seen any scenario of decreasing fees. Segwit2x is focused on decreasing fees but eventually miners are against it. And yes no one barely accepts other coins as they are more sort of an investment than a currency