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Author Topic: Evilness in the fees  (Read 1442 times)
Borilla
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November 23, 2017, 12:23:34 AM
 #1

In short: if we increase the number of transactions per second then big miners could (and would) naturally mine smaller blocks (for a short time) till the transaction waiting line appears again so that fees increase.

They have interest in maintaining a constant waiting line.

Maybe they already do that now.

The real problem is in the concept of the fees itself***: paying fees don't make transactions go faster, it just makes individual transactions pass infront of others. Nothing absolutely wrong here. But it gives incentive to miners to keep the waiting line and this is wrong. Also it is only a short term profitable strategy as higher fees and higher profits will bring more miners and so then less profit. So it starts a vicious circle that worsen the problem we wanted to solve at first.

***EDIT: The real problem is in the concept of the fees itself as it's done now. I'm not trying to say fees are evil




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alexpayne
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November 23, 2017, 12:27:21 AM
 #2

Paying the higher fees than other will turn you into the high prioty of processing transaction. So it means your transaction will be finished faster than others one .

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November 23, 2017, 02:45:06 AM
 #3

There is a cost to every transaction. Anything that promises you fee free is either a load of nonsense or you are being charged somewhere else. Look at it from a miner's perspective, for processing your transactions I will charge you a fee, I would preferably process transactions which are more profitable to me. Competition is a good thing because it typically drives prices lower not higher.
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November 23, 2017, 04:43:55 AM
 #4

There is an incentive to manipulate the total fee paid per block by miners sending money to themselves with a certain fee below the expected cutoff for inclusion in a block.  That way it doesn't cost them anything to increase the total fee per block.

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November 23, 2017, 01:17:30 PM
 #5

In short: if we increase the number of transactions per second then big miners could (and would) naturally mine smaller blocks (for a short time) till the transaction waiting line appears again so that fees increase.

They have interest in maintaining a constant waiting line.

Maybe they already do that now.

The real problem is in the concept of the fees itself: paying fees don't make transactions go faster, it just makes individual transactions pass infront of others. Nothing absolutely wrong here. But it gives incentive to miners to keep the waiting line and this is wrong. Also it is only a short term profitable strategy as higher fees and higher profits will bring more miners and so then less profit. So it starts a vicious circle that worsen the problem we wanted to solve at first.


I disagree with your logic. If there was a single miner he could do that, but miners are in competition and will always pick as much transactions as they can to collect their fees. Including less transactions will mean giving away free money to someone else, who will include it.
mda
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November 23, 2017, 02:55:23 PM
 #6

The fees aren't a problem but the lack of block space is. I have proposed a way to scale the bitcoin network on chain https://bitcointalk.org/index.php?topic=2381234.0 , so far the development team is afraid to make radical moves. Meanwhile BCH and co. slowly but surely creep up https://coinmarketcap.com .
stompix
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November 23, 2017, 03:05:04 PM
 #7

But it gives incentive to miners to keep the waiting line and this is wrong.

Double edge sword.

Because while you deny tx in your blocks you also lose the tx fees.
Which the other miners will not, increasing their profits, adding more private miners to their pool with the incentive in earnings, gaining more hashrate, more blocks...you get the point.

Even if they try to form a cartel, there are a lot of miners who will switch to the pools that mine full blocks giving those the advantages.
And please don't start with the theory that wu has all the hashrate in the world.


Anon
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November 23, 2017, 03:51:20 PM
 #8

It's only gonna get worse. The fees are rising every week. It's completely unsustainable and gonna end badly soon.
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November 23, 2017, 04:23:45 PM
 #9

The fees aren't a problem but the lack of block space is. I have proposed a way to scale the bitcoin network on chain https://bitcointalk.org/index.php?topic=2381234.0 , so far the development team is afraid to make radical moves. Meanwhile BCH and co. slowly but surely creep up https://coinmarketcap.com .

Doing something radical to counter Bitcoin Cash, will be more stupid now. Bitcoin Core has set a road map to work towards implementing the

Lightning Network as a total solution. A lot of us might not like the direction this is going in, but it is definitely a better solution than just

kicking the can down the road with constant Block size upgrades.  Huh What did you propose?

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mda
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November 23, 2017, 05:16:03 PM
 #10

kicking the can down the road with constant Block size upgrades.  Huh What did you propose?
Of course my proposal is radical but hopefully not stupid.
You can read a short explanation at https://bitcointalk.org/index.php?topic=2381234.0 .
brontosaurus
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November 23, 2017, 07:26:03 PM
 #11

In short: if we increase the number of transactions per second then big miners could (and would) naturally mine smaller blocks (for a short time) till the transaction waiting line appears again so that fees increase.

They have interest in maintaining a constant waiting line.

Maybe they already do that now.

The real problem is in the concept of the fees itself: paying fees don't make transactions go faster, it just makes individual transactions pass infront of others. Nothing absolutely wrong here.
Got to agree with you on this matter. Considering the height of popularity and adoption bitcoin has gained it is quite obvious that there would be a good waiting line always present. Moreover, consider it or not but bitcoin is actually becoming much more centralized. Miners have realized the difficulty they are facing in mining new blocks. Therefore they are aiming at making more profits from fees structure.

Quote
But it gives incentive to miners to keep the waiting line and this is wrong. Also it is only a short term profitable strategy as higher fees and higher profits will bring more miners and so then less profit. So it starts a vicious circle that worsen the problem we wanted to solve at first.


No! Its actually a long term benefit for them too considering that increasing the amount of miners today is absolutely too difficult. Bitcoin mining today requires a whole lot of effort than ever. Only a handful of established miners are able to tackle such issues. And they are picking up advantage of this very thing.
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November 23, 2017, 08:09:00 PM
 #12

The fees aren't a problem but the lack of block space is. I have proposed a way to scale the bitcoin network on chain https://bitcointalk.org/index.php?topic=2381234.0 , so far the development team is afraid to make radical moves. Meanwhile BCH and co. slowly but surely creep up https://coinmarketcap.com .

Doing something radical to counter Bitcoin Cash, will be more stupid now. Bitcoin Core has set a road map to work towards implementing the

Lightning Network as a total solution. A lot of us might not like the direction this is going in, but it is definitely a better solution than just

kicking the can down the road with constant Block size upgrades.  Huh What did you propose?
Bitcoin cash is only going up short term. Increasing block size is only a temporary fix to a bigger issue. I completely entrust the core team with the task to find and develop the best suitable solution for bitcoin's problem right now. They're working on LN and I expect it to come out somewhere late 2018 so by that time things should be looking a lot better. Let's not rush things just because some other altcoin is radically changing blocksizes. Bitcoin cash is still super new and unproven.
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November 23, 2017, 09:31:12 PM
 #13

im evading bitcoin fees with litecoin.i wont pay this huge fee anymore for my payouts and its a lot faster than a btc transaction.

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TechPriest
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November 23, 2017, 10:05:31 PM
 #14

In short: if we increase the number of transactions per second then big miners could (and would) naturally mine smaller blocks (for a short time) till the transaction waiting line appears again so that fees increase.

They have interest in maintaining a constant waiting line.

Maybe they already do that now.

The real problem is in the concept of the fees itself: paying fees don't make transactions go faster, it just makes individual transactions pass infront of others. Nothing absolutely wrong here. But it gives incentive to miners to keep the waiting line and this is wrong. Also it is only a short term profitable strategy as higher fees and higher profits will bring more miners and so then less profit. So it starts a vicious circle that worsen the problem we wanted to solve at first.







Yep, but this is real problem: without fees miners will not have incentives for mining and it will be better to mine empty blocks rather than full blocks.
More miners - better system. If someone don't want to mine your transactions, another will do that.

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November 23, 2017, 11:14:30 PM
 #15

It's only gonna get worse. The fees are rising every week. It's completely unsustainable and gonna end badly soon.
No it isn't and it won't.

The markets will readjust, over and over. The equilibrium points reached at what you see and will continue to see.
Borilla
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November 24, 2017, 12:05:47 AM
 #16

But it gives incentive to miners to keep the waiting line and this is wrong.

Double edge sword.

Because while you deny tx in your blocks you also lose the tx fees.
Which the other miners will not, increasing their profits, adding more private miners to their pool with the incentive in earnings, gaining more hashrate, more blocks...you get the point.

Even if they try to form a cartel, there are a lot of miners who will switch to the pools that mine full blocks giving those the advantages.
And please don't start with the theory that wu has all the hashrate in the world.



They don't really need to form a cartel if it is common interest for all. Creating a waiting line has a fixed cost. But when the waiting line is created it raises fees for a long time.


Also, even  if a minority of miners try to create a waiting line it will slow down the transaction (proportionally to their hash power) so they might manage to create waiting transactions and raise the fees

---------------------------------------------------


Quote
But it gives incentive to miners to keep the waiting line and this is wrong. Also it is only a short term profitable strategy as higher fees and higher profits will bring more miners and so then less profit. So it starts a vicious circle that worsen the problem we wanted to solve at first.


No! Its actually a long term benefit for them too considering that increasing the amount of miners today is absolutely too difficult. Bitcoin mining today requires a whole lot of effort than ever. Only a handful of established miners are able to tackle such issues. And they are picking up advantage of this very thing.

ok, so you say that if fees go higher it will not bring more hash power because today mining is already difficult enough?

then the ones who do business selling mining hardwares will want to raise the fee even higher

you see where i'm going? you have a short term equilibrium with the fees that seems okay, but the long term equilibrium would really arm the transactions. I'm really trying to spot the evil part here. I believe it can be fixed in many ways.


----------------------------------



Yep, but this is real problem: without fees miners will not have incentives for mining and it will be better to mine empty blocks rather than full blocks.
More miners - better system. If someone don't want to mine your transactions, another will do that.

if we agree on the problem  solutions will come
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November 24, 2017, 12:57:42 AM
 #17

The fees aren't a problem but the lack of block space is. I have proposed a way to scale the bitcoin network on chain https://bitcointalk.org/index.php?topic=2381234.0 , so far the development team is afraid to make radical moves. Meanwhile BCH and co. slowly but surely creep up https://coinmarketcap.com .

Doing something radical to counter Bitcoin Cash, will be more stupid now. Bitcoin Core has set a road map to work towards implementing the

Lightning Network as a total solution.
A lot of us might not like the direction this is going in, but it is definitely a better solution than just

kicking the can down the road with constant Block size upgrades.  Huh What did you propose?

Total solution?

No, it is just one idea.

It would be nice to be able to try it out, say on testnet.
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November 24, 2017, 01:12:09 AM
 #18

The fee's and transaction times are controlled by the miners, who would profit from a globally adopted network that could be used for merchant services. So despite the theory, there would be a lot more value in speeding up transactions and lowering fees. Because then bitcoin would actually be usable as a proper currency in real world application.

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November 24, 2017, 02:39:09 PM
 #19

Totally most wallets are nonsense in fees calculation, I use 50 sat/byte or even less, usually tx get confirmed in day or two.

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November 24, 2017, 02:52:28 PM
 #20

If you need to speed up confirmation time, then you need to mine blocks faster - it's as simple as that. With an average of 10 minutes to generate a block, then one can expect around 30 minutes for two confirmations. Messing with the blocksize and other changes won't change that simple fact.

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