How to make transfer fees efficient

[razorseal]

Hello,

Very new to cryptocurrency... I wish I got in on this game in around 2012 when I first looked into it. I'd be much richer than I am now... Oh well, better start now than later.

I had a question regarding transfer fees. I noticed the transfer fees are very high with bitcoin. I understand the fundementals of it, and grasp the basic idea. Unlike a bank that might charge you 10 dollars to send 100 dollars, bitcoin checks to see if you have 100x1 dollar bills, or 1x100 dollar bill (size of data being transferred for hashing?) Well I noticed with bitcoin, these fees can be very high... It really makes bitcoin inefficient for everday currency (imagine giving your friend 20 dollars via bitcoin... you might pay fees half as much).

So I'm here to understand how to make the transfer fees more efficient. Is that even possible?

Thanks!

[LoyceV]

First, it's up to you how much fee you pay. Check https://btc.com/stats/unconfirmed-tx, and realize you can pay less if you're not in a hurry. Currently 40 Satoshis/byte is enough, usually transactions are cheapest on Sundays.
You could probably make a transaction now with 20 Satoshis/byte, and I expect it to confirm within 12 hours. If you're not in a rush, this is the way to do it.

Unlike a bank that might charge you 10 dollars to send 100 dollars, bitcoin checks to see if you have 100x1 dollar bills, or 1x100 dollar bill

Bitcoin is electronic cash, so the comparison to bills makes more sense than comparing it with a bank account. The way to deal with this is to prevent having small change in your wallet. You currently can't use Bitcoin to sell items for a few dollars each, fees are simply too high for that.

(imagine giving your friend 20 dollars via bitcoin... you might pay fees half as much)

Your friend trusts you, so he shouldn't be in a rush to get this payment confirmed. You can use a low fee.
Another solution to pay less in fees is to bundle transactions, it reduces the fee per output. For example, I received this transaction today. It paid $5 in fees, and sent funds to over 50 different addresses.

Another option to use lower fees is using SegWit addresses.

[razorseal]

I understand what you mean, and do understand we see bitcoin as cash, and not exactly a bank account, but then I feel like bitcoin is a lose lose.

when I hand my friend 20 dollars over, it is an instant transfer with no fees. When I pay for a pack of gum at the shady stop and shop, we have no trust in each other, but he takes my money, checks to see if it's counterfeit and transaction is done. With 0 transfer fees. Sounds like USD is simpler and easier this way.

Now let's use a bank account example. If I send you 100 dollars right now because you're a nice person on here and deserve a donation (and you need that 100 dollars right now because your electric is about to be shut off today by COB unless you pay the 95 dollar bill, and you have no money) we can make this happen with alternative ways like zelle or venmo.

Now let's change the scenario to bitcoin...

I give my friend 20 dollars and use a low fee because he's in no rush. I lose a dollar on the transaction... ok.. oh well. lol

I pay for a pack of gum at the shady stop and shop. We don't trust each other. How will he feel if I give him money and he will hopefully get it tomorrow?

and the 100 dollar donation scenario. Well... it's not gonna work. You're screwed, you'd be better off me sending you zelle, or maybe an alt-coin. Bitcoin loses in all scenarios 

I'm new here and I'm not trying to dis anything. I just want to learn and understand it better. I bought .01 btc on gdax few days ago at 7950 and kept watching it drop to 7300 yesterday and today. Finally we broke 8000 USD and now it's going up and up. So I'm happy. I truly do see bitcoin going up and up, but I'm having a tough time understanding it's application in everyday life. I just see it as an investment tool as of now, because it sure makes money. I'd be a millionaire had I invested in this 5 years ago when I heard about it lol.

[LoyceV]

Now let's change the scenario to bitcoin...

I give my friend 20 dollars and use a low fee because he's in no rush. I lose a dollar on the transaction... ok.. oh well. lol

I pay for a pack of gum at the shady stop and shop. We don't trust each other. How will he feel if I give him money and he will hopefully get it tomorrow?

and the 100 dollar donation scenario. Well... it's not gonna work. You're screwed, you'd be better off me sending you zelle, or maybe an alt-coin. Bitcoin loses in all scenarios  

Bitcoin needs a scaling solution. Blocks have been full for over a year now, which is what pushes fees up.
But luckily, you have options: for example, you can pay large amounts with Bitcoin, and small amounts with altcoins. I have several wallets for several altcoins, and can accept either one of them. But in the end, all people really want is more Bitcoins, and that's what gives Bitcoin it's value. Despite the high fees.

[razorseal]

Will bitcoin be ever able to fix this problem? Or this something written in too deep within bitcoin that can't really be fixed?

I haven't 100% decided what wallet I want to use. I'm still using coinbase as my "wallet". I've looked into mycelium, exodus and jaxx as well as cold wallets. I'd like something I can use on the go, which really takes exodus and cold wallets out. Mycelium and Jaxx are the only options left, but not sure how those work if the company dissapears... Where is my private key stored? Little off topic now but so many questions being new to this.