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Author Topic: Whats the point of 'dust' payments? Does anyone really need to send microcents?  (Read 1271 times)
Stampbit
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June 14, 2013, 01:53:45 AM
 #1

This is part of the reason the max blocksize was to be updated to deal with these payments clogging the system, why would anyone send fractions of a cent?
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June 14, 2013, 03:53:16 AM
 #2

SBeing able to send arbitrarily small amounts have tons of uses here are some I could think of right off the bat.
Voting schemes, ironically: anti spam measures for account creation, verifiable data where certain amounts have meaning between two or more people. The blockchain has many uses other than a currency ledger.
Instead of banning dust, a way to have "litenodes" that only have unspent outputs instead of the full history, and then measures to compound dust.

Edit: when you say, fractions of a cent, keep in mind you're referring to an exchange rate which is over 50x the value it was at two years ago.
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June 14, 2013, 08:20:15 AM
 #3

You have to think bigger. Half the people on this planet have net worths measured in the hundreds. What is a cent, or a fraction of a cent to you is enough to buy a coffee, or lunch in another country - a country where Bitcoin adoption will be more rapid and ubiquitous, because its utility and value far outstrips their national fiat currency. Dust payments are everything.
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June 14, 2013, 08:25:36 AM
 #4

SBeing able to send arbitrarily small amounts have tons of uses here are some I could think of right off the bat.
Voting schemes, ironically: anti spam measures for account creation, verifiable data where certain amounts have meaning between two or more people. The blockchain has many uses other than a currency ledger.
Instead of banning dust, a way to have "litenodes" that only have unspent outputs instead of the full history, and then measures to compound dust.

Edit: when you say, fractions of a cent, keep in mind you're referring to an exchange rate which is over 50x the value it was at two years ago.

All of those are not real uses. You can't vote with an address because the voter can just create multiple addresses easily. The same applies to account creation. Verifiable data isn't necessary, you don't need someone to send you 1.000023957 BTC just create a new address and have them send to their "personal" address so you know it's them.

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mustyoshi
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June 14, 2013, 03:25:23 PM
 #5

SBeing able to send arbitrarily small amounts have tons of uses here are some I could think of right off the bat.
Voting schemes, ironically: anti spam measures for account creation, verifiable data where certain amounts have meaning between two or more people. The blockchain has many uses other than a currency ledger.
Instead of banning dust, a way to have "litenodes" that only have unspent outputs instead of the full history, and then measures to compound dust.

Edit: when you say, fractions of a cent, keep in mind you're referring to an exchange rate which is over 50x the value it was at two years ago.

All of those are not real uses. You can't vote with an address because the voter can just create multiple addresses easily. The same applies to account creation. Verifiable data isn't necessary, you don't need someone to send you 1.000023957 BTC just create a new address and have them send to their "personal" address so you know it's them.

It's not like addresses can be put on a whitelist for voting or anything.

And the blockchain is forever, so there are uses for putting verifiable data in it.
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June 14, 2013, 03:37:34 PM
Last edit: June 14, 2013, 07:35:04 PM by DeathAndTaxes
 #6

Quote from: mustyoshi link=topic=233930.msg2474809#msg2474809
It's not like addresses can be put on a whitelist for voting or anything.

And the blockchain is forever, so there are uses for putting verifiable data in it.

It can still be accomplished above the dust threshold.  While I consider the prospects of eVoting with the blockchain dubious (the real issue is authentication) it could be done that it produces no spam and at no/low cost for participants.  Have users vote with a tx over 0.001 BTC so that it requires no/low fee and then return the funds used to signify the vote back to the voter after voting is complete.  The round trip record remains in the blockchain but not in the UXTO which is the critical resource.

Quote
Edit: when you say, fractions of a cent, keep in mind you're referring to an exchange rate which is over 50x the value it was at two years ago.

The min mandatory fee for low priority txs (which is how the dust limit is computed) has been reduced multiple times to accommodate the increased value of one Bitcoin.  The dust limit is at 0.0543 mBTC and the min mandatory fee (for low priority txs) is 0.1 mBTC.  When the OP is talking about "cents" he is likely talking about the purchasing power  which is roughly half a US penny.
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June 15, 2013, 12:27:31 AM
 #7

Yes, when one satoshi is worth one cent, people will want to sent dust payments  Grin

Dust payments are still possible with the protocol. The dust limit is a "soft limit" meaning any miner can change this limit as they see fit.

Some people are boycotting 0.8.2 because they don't understand that the limit is optional and they are really just whining that they can't find any miners who want to include their tx in a block. Boo hoo.
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June 15, 2013, 01:46:50 AM
 #8

You have to think bigger. Half the people on this planet have net worths measured in the hundreds. What is a cent, or a fraction of a cent to you is enough to buy a coffee, or lunch in another country - a country where Bitcoin adoption will be more rapid and ubiquitous, because its utility and value far outstrips their national fiat currency. Dust payments are everything.
>implying you can't increase dust limit later
>implying it's practical in real life to send sub cent value transactions
>implying "b-b-but what if in the future it's worth more" argument holds for any other currency/commodity.

It is pitch black. You are likely to be eaten by a grue.

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DeathAndTaxes
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June 15, 2013, 03:56:09 PM
 #9

You have to think bigger. Half the people on this planet have net worths measured in the hundreds. What is a cent, or a fraction of a cent to you is enough to buy a coffee, or lunch in another country - a country where Bitcoin adoption will be more rapid and ubiquitous, because its utility and value far outstrips their national fiat currency. Dust payments are everything.

Well looks look at those people.  It is unlike Bitcoin will take off anywhere that doesn't at least have SMS cellphone capabilities.  This means infrastructure, critical mass of users with cellphones and some "Bitcoin" provider to offer a Bitcoin over SMS service.  

The closest fiat equivelent is mPESA and usage has exploded because it allows small transactions and "reasonable" cost.

So lets compare mPESA & Bitcoin fee and tx minimums
http://www.safaricom.co.ke/personal/m-pesa/m-pesa-services-tariffs/tariffs

1 Ksh = $0.012 USDs

mPESA
Min transaction:  10 Ksh (12 cents US)
Fee on min transaction: 3 Ksh (3.6 cents US)
Fee as a % of transaction: 30%.  

Bitcoin (note this is just protocol cost, a service provider may add additional fees)
Min transaction:  .0543 mBTC (0.5 cents US)
Fee on min transaction:  0.05 mBTC* (0.5 cents US)
Fee as a % of transaction: 100% * (see footnote below)

Now lets look at Bitcoin & mPESA at various transaction sizes.

Code:
Transaction amt mPesa Bitcoin Fees %
 10 Ksh ($0.12)  3 Ksh 1 Ksh 30% 10.0%
 50 Ksh ($0.58)  5 Ksh 1 Ksh 10%  2.0%
100 Ksh ($1.17)  5 Ksh 1 Ksh  5%  1.0%
200 Ksh ($2.34) 27 Ksh 1 Ksh 14%  0.5%
500 Ksh ($5.84) 27 Ksh 1 Ksh  5%  0.2%
855 Ksh ($9.99) 33 Ksh 1 Ksh  4%  0.1%

(In case it isn't clear, 10 Ksh transferred is roughly $0.12.  It has a 3 Ksh fee on mPESA network (30%) and a 1 Ksh min fee on the Bitcoin network (10%).  


I think Bitcoin will be just fine for emerging markets.  While SMS based service could be 100% on blockchain it is likely that such a service would be off blockchain or possibly a hybrid where users keep large amounts on blockchain and transfer it into an on blockchain account to allow lower cost small transactions.  mPESA to my knowledge is the electronic payment network with the smallest payment option although even there amounts under 100 Ksh ($1.17 USD) are excessively expensive.   mPESA is the most popular electronic payment network in Africa and Bitcoin is still cheaper at all transaction levels.  The min tx size or blockchain fees aren't the limitation of adoption in emerging markets.



*This is the reason for the dust threshold.  Fees are based on the output being spent and are per KB and one can get at least two inputs and two outputs (payment & change) under the 1KB thus the fee per output being spent is roughly half the min transaction cost (0.1 mBTC), thus transactions smaller than half the current min fee do not make economical sense.  Not sure why Gavin felt the need to have so much precision (5430 Satoshi) for the default value.  Would be easier to just say 5000 Satoshis (0.05 mBTC)
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June 15, 2013, 04:33:24 PM
 #10

SBeing able to send arbitrarily small amounts have tons of uses here are some I could think of right off the bat.
Voting schemes, ironically: anti spam measures for account creation, verifiable data where certain amounts have meaning between two or more people. The blockchain has many uses other than a currency ledger.
Instead of banning dust, a way to have "litenodes" that only have unspent outputs instead of the full history, and then measures to compound dust.

Edit: when you say, fractions of a cent, keep in mind you're referring to an exchange rate which is over 50x the value it was at two years ago.

I agree with you, but what if people used other altcurrencies as these dust transactions and satisfy quite a few sides.

Use my referral link if you want: https://primedice.com/?ref=Crazynoggin
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June 15, 2013, 05:11:00 PM
 #11

Quote
Does anyone really need to send microcents?


Apparently the people who run the "Free Bitcoins" sites seem to feel that they do.
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